LGPS and AVCs - 25% tax free element????

2biscuit

Hi 

I am hoping someone can set me right on a question I have re AVCs and LGPS pensions. In particular I have two separate (not merged) LGPS pensions managed by different LGPS funds (Oxfordshire and Berkshire). I also have two AVC accounts relating to the two pensions. My main pension  comprises the period 1992-2018 has the smallest AVC (all post 2015), whilst the second very small LGPS pension (2018-) has by far the biggest AVC associated with it.

1) In relation to the tax free 25% aspect how do you value the LGPS pension especially as I will be retiring early? Is this simply a multiple of the reduced pension?

2) I am trying to establish if I claim both pensions at the same time whether I can for tax purposes combine the pensions and AVC accounts together and in that way get all of the AVC within the 25% tax free element or do I need to treat each pension and AVC seperately i.e. value of pension A & AVC A divide by 4 = tax free element, similar calculation for pension B and AVC B?

Many thanks

Silvertabby

Both funds will be assessed separately for the maximum tax free cash.

If the AVC attached to your current pension exceeds the tax free limit you could use the excess to buy additional index linked LGPS benefits with the surplus.

2biscuit

Silvertabby said:

Both funds will be assessed separately for the maximum tax free cash.

If the AVC attached to your current pension exceeds the tax free limit you could use the excess to buy additional index linked LGPS benefits with the surplus.

Many thanks for that. Can I ask another question?

Are those additional benefits APCs? And if I am retiring early (56) I assume they will be subject to a similar reduction to the normal LGPS pension?

2biscuit

2biscuit said:

Silvertabby said:

Both funds will be assessed separately for the maximum tax free cash.

If the AVC attached to your current pension exceeds the tax free limit you could use the excess to buy additional index linked LGPS benefits with the surplus.

Many thanks for that. Can I ask another question?

Are those additional benefits APCs? And if I am retiring early (56) I assume they will be subject to a similar reduction to the normal LGPS pension?

Having checked elsewhere the answer to those two questions is yes and yes. Thank you very much that has helped a lot

Silvertabby

2biscuit said:

Silvertabby said:

Both funds will be assessed separately for the maximum tax free cash.

If the AVC attached to your current pension exceeds the tax free limit you could use the excess to buy additional index linked LGPS benefits with the surplus.

Many thanks for that. Can I ask another question?

Are those additional benefits APCs? And if I am retiring early (56) I assume they will be subject to a similar reduction to the normal LGPS pension?

They are more of an annuity than an APC.  The factors are age related, so £X at 56 will buy a smaller pension than the same £X at 65.