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Help! Boosting Pension

I am 40 years old with a very small pension pot (due to moving around jobs with small employers previously).  I am a civil servant now (few years now), and part of the Alpha civil service pension scheme.  I earn £40k. I am married with 1 child (we are both basic rate taxpayers).

I have an extra £100 from my monthly pay, which I want to use towards my boosting/increasing my pension.  However, I am really confused as to which option I should consider:

- Buying additional pension
- AVCs
- SIPP

I have read up on these options, but still confused which to opt for - any hints and tips would be really appreciated!!

Comments

  • I am also a civil servant, and I have recently joined the CS AVC scheme. 

    The charges for the L&G scheme are very low (0.12% platform fees, plus fund fees which are also very reasonable). You can transfer your previous pensions into it and these will also benefit from the low charges (which I have also done).

    The fund selection is also pretty decent - obviously not as broad as what you'll get with a SIPP but sufficient for most needs I would have thought. There is no tax advantage relative to a SIPP (as it's via the net pay method, so you will still pay NI) but it comes straight out of your payslip so I guess that's easier.

    There are benefits to added pension too if you want to get more guaranteed DB income, but I liked the idea of having a more flexible (even if relatively small atm) DC pot to supplement my DB pension. Another advantage is that you can vary your contributions whenever and as often as you like, whereas for added pension you can only do it at the start of the tax year.

    I sound like an evangelist for the CSAVC scheme as I have commented on this a few times now, but I have found the process quite straightforward so I would recommend it.
  • Albermarle
    Albermarle Posts: 26,029 Forumite
    10,000 Posts Sixth Anniversary Name Dropper
    If you think you may only be in this job for a few more years, then buying extra guaranteed pension income in the CS scheme could be better.
    If you think you will maybe be there for 20/25 years and therefore build up a good CS pension, then the flexibility of adding AVC' s to the L&G pension as described above could be a good option
  • xylophone
    xylophone Posts: 45,428 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Do you currently have both a  current DB pension with the CS and other small DC pensions/DB pensions from old employments?
  • xylophone said:
    Do you currently have both a  current DB pension with the CS and other small DC pensions/DB pensions from old employments?
    Yes I have a current DB pension with the CS, and 2 other small DC pensions from old employments.
  • xylophone
    xylophone Posts: 45,428 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    You could consider opening a SIPP, transferring in the two DC pensions (if possible) and contributing £100 a month  - perhaps something simple?
  • xylophone said:
    You could consider opening a SIPP, transferring in the two DC pensions (if possible) and contributing £100 a month  - perhaps something simple?
    To be honest, I hadn't considered that! Will look into it though thank you!

    Noting the other responses above (thanks all!) Would this be better than just paying into the CS avc scheme?


  • Albermarle
    Albermarle Posts: 26,029 Forumite
    10,000 Posts Sixth Anniversary Name Dropper
    me1234 said:
    xylophone said:
    You could consider opening a SIPP, transferring in the two DC pensions (if possible) and contributing £100 a month  - perhaps something simple?
    To be honest, I hadn't considered that! Will look into it though thank you!

    Noting the other responses above (thanks all!) Would this be better than just paying into the CS avc scheme?


    Both the AVC scheme and a SIPP are defined contribution ( DC ) schemes so work by the same legal and tax rules. The differences can be - charges ( L& G seem low) and choice of investments ( a lot more in the SIPP but for most people a lot of choice is just confusing) 
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