Civil Service Alpha, buy added pension or AVC?

I'm so confused about pensions. I'm 50, have been in Alpha scheme for 3 years. I want to put in a lump sum but don't understand the difference between buying added pension or AVC. I have some savings in ISAs, but no other pension. 

Comments

  • gmje
    gmje Posts: 48 Forumite
    10 Posts First Anniversary
    My own experience with pension and im now just retired I wouldnt trust them with any money. i would maximize ISA and the find the best fixd rate bond. or gamble with premium bonds you could be lucky. but the pension companies ,in my opinion are maximizing share holders returns and not evenreturning as much as a good savings account 
  • Beth466 said:
    I'm so confused about pensions. I'm 50, have been in Alpha scheme for 3 years. I want to put in a lump sum but don't understand the difference between buying added pension or AVC. I have some savings in ISAs, but no other pension. 
    Buying added pension has the advantage of you knowing what you are buying and the extra pension is for life and increased by the Sept rate of CPI. The AVC option is more of a gamble because you don’t have a guaranteed amount of pension, but you can take 25% tax free and the remainder when you want, or buy an annuity. So really it depends on what you want. 
  • If I buy added pension but just for myself and not for dependents, does that mean if I die, that extra money paid in just disappears? Both if I die before and after I start getting my pension?
  • Universidad
    Universidad Posts: 410 Forumite
    100 Posts Second Anniversary Name Dropper
    edited 3 February 2024 at 5:50PM
    Beth466 said:
    If I buy added pension but just for myself and not for dependents, does that mean if I die, that extra money paid in just disappears? Both if I die before and after I start getting my pension?
    You can read the full information on death benefits here:
    There's information about how both your regular Alpha pension and any Added Pension that you buy would be affected.
    The short version is that a proportion of your regular Alpha pension would be payable to a dependent if you were to predecease them, but the Added Pension depends on whether you buy "Self" or "Self and Dependents" Added Pension. 
    However other benefits are payable if you die before retirement, and it works slightly differently depending on whether you still paying in to Alpha, or whether you have already left Alpha and are no longer an active member.
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