AVC and LGPS lump sum

Can you take the AVC as a lump sum and also 25% TFLS when you retire or is it one or the other?

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  • Silvertabby
    Silvertabby Forumite Posts: 8,579
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    edited 19 September at 3:23AM
    Maria2512 said:
    Can you take the AVC as a lump sum and also 25% TFLS when you retire or is it one or the other?
    Neither.  A new calculation has been introduced since I retired, but the old one will give you an idea.
    That is:
    20X annual pension plus 1 X any automatic lump sum plus 1 X AVC fund X 25%.
    If the answer is more than your AVC fund, then you can increase your tax free lump sum to the maximum allowed by commuting part of your annual pension.  ie, give up some of your pension in return for tax free cash at the not-so-favourable rate of 1:12.  Or, if your AVC fund is more than the 25% allowed, then you could use the surplus to buy additional index linked LGPS benefits.
  • Maria2512
    Maria2512 Forumite Posts: 37
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    Maria2512 said:
    Can you take the AVC as a lump sum and also 25% TFLS when you retire or is it one or the other?
    Neither.  A new calculation has been introduced since I retired, but the old one will give you an idea.
    That is:
    20X annual pension plus 1 X any automatic lump sum plus 1 X AVC fund X 25%.
    If the answer is less than your AVC fund, then you can increase your tax free lump sum to the maximum allowed by commuting part of your annual pension.  ie, give up some of your pension in return for tax free cash at the not-so-favourable rate of 1:12.  Or, if your AVC fund is more than the 25% allowed, then you could use the surplus to buy additional index linked LGPS benefits.
    Thanks ST, that’s cleared that up concisely 
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