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LGPS query

When it comes to buying APC or transferring an existing DC pension into the LGPS, are the amounts both of those options would generate generally similar or can they vary widely?

I can use the calculator to see that a lump sum APC purchase that costs me £25k would give me around £3k of LGPS APC; if I transferred an old pension of £25k into the LGPS instead, would it likely offer a similar amount of pension?

Comments

  • Silvertabby
    Silvertabby Posts: 9,726 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper Photogenic
    edited 13 September 2023 pm30 12:04PM
    Not necessarily, as different factors are used.  You could ask for a transfer in quote, then compare the figures before making a final decision.

    Of course, I'm assuming that you are within your first 12 months of LGPS membership AND your employer has confirmed that they accept transfers in from a DC scheme.  Not all do.

    ADD
    Looking at your previous posts, you have been in the LGPS for more than 12 months, so a transfer in is no longer an option for you.

    I always used to say that APCs are good value for those who intend retiring at SPA, perhaps not so much for tbose who want to go before 60, due to the early payment reductions.  Have you had a look at AVCs?  They are usually a more flexible option, as you can choose between taking the whole AVC as tax free cash (within HMRC limits) or using it to buy additional index linked LGPS benefits.  Also note that APCs don't offer survivor's benefits, whereas additional pensions bought with an AVC can.
  • Thanks Silvertabby, I was hoping you’d answer. It’s a hypothetical question really, as I’ve done more than 12 months and my LGPS doesn’t accept transfers in, however I am considering a new job with an LGPS that does accept transfers in, so could become a reality. I’ll ask for a transfer quote if and when it comes to it - thanks again. 
  • Not necessarily, as different factors are used.  You could ask for a transfer in quote, then compare the figures before making a final decision.

    Of course, I'm assuming that you are within your first 12 months of LGPS membership AND your employer has confirmed that they accept transfers in from a DC scheme.  Not all do.

    ADD
    Looking at your previous posts, you have been in the LGPS for more than 12 months, so a transfer in is no longer an option for you.

    I always used to say that APCs are good value for those who intend retiring at SPA, perhaps not so much for tbose who want to go before 60, due to the early payment reductions.  Have you had a look at AVCs?  They are usually a more flexible option, as you can choose between taking the whole AVC as tax free cash (within HMRC limits) or using it to buy additional index linked LGPS benefits.  Also note that APCs don't offer survivor's benefits, whereas additional pensions bought with an AVC can.
    Hi Silvertabby, I’m in the LGPS and am considering using my AVC funds to buy extra LGPS in 3 years time at my retirement. Is this possible to do, I’m only looking at about £35,000 from my AVC so I know it won’t buy a great pension increase but with index linking I hope to mitigate some inflation. Thanks in advance for any help.
  • Not necessarily, as different factors are used.  You could ask for a transfer in quote, then compare the figures before making a final decision.

    Of course, I'm assuming that you are within your first 12 months of LGPS membership AND your employer has confirmed that they accept transfers in from a DC scheme.  Not all do.

    ADD
    Looking at your previous posts, you have been in the LGPS for more than 12 months, so a transfer in is no longer an option for you.

    I always used to say that APCs are good value for those who intend retiring at SPA, perhaps not so much for tbose who want to go before 60, due to the early payment reductions.  Have you had a look at AVCs?  They are usually a more flexible option, as you can choose between taking the whole AVC as tax free cash (within HMRC limits) or using it to buy additional index linked LGPS benefits.  Also note that APCs don't offer survivor's benefits, whereas additional pensions bought with an AVC can.
    Hi Silvertabby, I’m in the LGPS and am considering using my AVC funds to buy extra LGPS in 3 years time at my retirement. Is this possible to do, I’m only looking at about £35,000 from my AVC so I know it won’t buy a great pension increase but with index linking I hope to mitigate some inflation. Thanks in advance for any help.
    Most people take out AVCs for the tax relief in/tax free out benefit, but using some or all of your AVC to buy index linked LGPS benefits is certainly an option.  Once you are within 12 or 6 months (different LGPSs have different rules) of your intended retirement date you should be able to request an estimate, based on using your AVCs to buy additional pension.
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