📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

USS IB

Options
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

Comments

  • Southend_2
    Southend_2 Posts: 146 Forumite
    Part of the Furniture 100 Posts Name Dropper
    edited 30 September 2022 at 8:59AM
    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
    PJM_62 Posts: 203 Forumite
    Part of the Furniture 100 Posts Name Dropper
    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
  • 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
    ussdave Posts: 372 Forumite
    Fifth Anniversary 100 Posts Name Dropper
    PJM_62 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
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.1K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.6K Spending & Discounts
  • 244.1K Work, Benefits & Business
  • 599K Mortgages, Homes & Bills
  • 177K Life & Family
  • 257.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.