USS IB

NTFI19081

Hello - would any USS experts tell me if you think that there are advantages (beyond salary sacrifice) to having all investments in the Inv Builder. I have around half my non-Retirement Income Builder funds in the USS Inv Builder and the other half in a SIPP. I will retire in around 7-10 years, so am wondering if I would be better of consolidating it all in USS and the topping up from there? cheers

Southend_2

NTFI19081 said:

Hello - would any USS experts tell me if you think that there are advantages (beyond salary sacrifice) to having all investments in the Inv Builder. I have around half my non-Retirement Income Builder funds in the USS Inv Builder and the other half in a SIPP. I will retire in around 7-10 years, so am wondering if I would be better of consolidating it all in USS and the topping up from there? cheers

You can potentially take more than 25% of the investment builder funds tax free when you commence your DB pension. Max tax free cash amount is 25% of the total value of the income builder and investment builder minus the DB lump sum. Investment builder is valued at 20x annual pension for those purposes. So e.g. if you have £10k DB with £30k lump sum and  £30k in investment builder you could take 25% of 10k x 20 plus 30k plus 30k. Allowing the whole 30k to be taken tax free from the investment builder in addition to the 30k income builder lump sum.

PJM_62

Southend_2 said:

NTFI19081 said:

Hello - would any USS experts tell me if you think that there are advantages (beyond salary sacrifice) to having all investments in the Inv Builder. I have around half my non-Retirement Income Builder funds in the USS Inv Builder and the other half in a SIPP. I will retire in around 7-10 years, so am wondering if I would be better of consolidating it all in USS and the topping up from there? cheers

You can potentially take more than 25% of the investment builder funds tax free when you commence your DB pension. Max tax free cash amount is 25% of the total value of the income builder and investment builder minus the DB lump sum. Investment builder is valued at 20x annual pension for those purposes. So e.g. if you have £10k DB with £30k lump sum and  £30k in investment builder you could take 25% of 10k x 20 plus 30k plus 30k. Allowing the whole 30k to be taken tax free from the investment builder in addition to the 30k income builder lump sum.

I'm a bit confused by that. The minus the DB lump sum bit.
Could you explain using worked calculation for those values.
Thanks

Universidad

NTFI19081 said:

Hello - would any USS experts tell me if you think that there are advantages (beyond salary sacrifice) to having all investments in the Inv Builder. I have around half my non-Retirement Income Builder funds in the USS Inv Builder and the other half in a SIPP. I will retire in around 7-10 years, so am wondering if I would be better of consolidating it all in USS and the topping up from there? cheers

You don't pay management and admin fees on IB, while you would with your SIPP. So if you are thinking of making further contributions to one or the other, then that is one potential advantage of IB. 

However, IIRC this doesn't apply to transfers in, so you wouldn't get that advantage from consolidating - just from new contributions.

ussdave

PJM_62 said:

Southend_2 said:

NTFI19081 said:

Hello - would any USS experts tell me if you think that there are advantages (beyond salary sacrifice) to having all investments in the Inv Builder. I have around half my non-Retirement Income Builder funds in the USS Inv Builder and the other half in a SIPP. I will retire in around 7-10 years, so am wondering if I would be better of consolidating it all in USS and the topping up from there? cheers

You can potentially take more than 25% of the investment builder funds tax free when you commence your DB pension. Max tax free cash amount is 25% of the total value of the income builder and investment builder minus the DB lump sum. Investment builder is valued at 20x annual pension for those purposes. So e.g. if you have £10k DB with £30k lump sum and  £30k in investment builder you could take 25% of 10k x 20 plus 30k plus 30k. Allowing the whole 30k to be taken tax free from the investment builder in addition to the 30k income builder lump sum.

I'm a bit confused by that. The minus the DB lump sum bit.
Could you explain using worked calculation for those values.
Thanks

Try reading through this thread (and the linked threads) to get a better understanding

https://forums.moneysavingexpert.com/discussion/comment/80309534#Comment_80309534