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Cashing in an FSAVC

PostMetaller
Posts: 6 Forumite

I am thinking about whether to cash-in my FSAVC at 55 in just over a couple of years.
It is currently worth about £17k with a projected annual income of around £500.
I am now a full-time carer, with little realistic opportunity to work at a level where I can make significant future pension contributions. I have a company pension scheme that starts at age 60 in excess of £18k pa and then further schemes at age 65 which will add another £5-6k pa. I will also be entitled to a full state-pension.
My thinking is this
(1) cash-in the FSAVC at 55 to take 25% tax-free cash (I believe that the FSAVC allows me to do this at 55, rather than 57)
(2) invest the balance into a SiPP, which would then also allow me the potential to make further contributions if circumstances change for me. This also, I think, prevents the MPAA being triggered?
Are there any flaws in my thinking or have I missed anything else I should consider?
It is currently worth about £17k with a projected annual income of around £500.
I am now a full-time carer, with little realistic opportunity to work at a level where I can make significant future pension contributions. I have a company pension scheme that starts at age 60 in excess of £18k pa and then further schemes at age 65 which will add another £5-6k pa. I will also be entitled to a full state-pension.
My thinking is this
(1) cash-in the FSAVC at 55 to take 25% tax-free cash (I believe that the FSAVC allows me to do this at 55, rather than 57)
(2) invest the balance into a SiPP, which would then also allow me the potential to make further contributions if circumstances change for me. This also, I think, prevents the MPAA being triggered?
Are there any flaws in my thinking or have I missed anything else I should consider?
0
Comments
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Projected incomes are irrelevant and understate likely outcomes.
It is currently worth about £17k with a projected annual income of around £500.My thinking is thisCashing in the personal pension (FSAVCs ceased to exist from 2006 and were reclassified as personal pensions) would trigger the MPAA. Transferring the pension to the SIPP would not.
(1) cash-in the FSAVC at 55 to take 25% tax-free cash (I believe that the FSAVC allows me to do this at 55, rather than 57)
(2) invest the balance into a SiPP, which would then also allow me the potential to make further contributions if circumstances change for me. This also, I think, prevents the MPAA being triggered?
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.1 -
PostMetaller said:I am thinking about whether to cash-in my FSAVC at 55 in just over a couple of years.
It is currently worth about £17k with a projected annual income of around £500.
I am now a full-time carer, with little realistic opportunity to work at a level where I can make significant future pension contributions. I have a company pension scheme that starts at age 60 in excess of £18k pa and then further schemes at age 65 which will add another £5-6k pa. I will also be entitled to a full state-pension.
My thinking is this
(1) cash-in the FSAVC at 55 to take 25% tax-free cash (I believe that the FSAVC allows me to do this at 55, rather than 57)
(2) invest the balance into a SiPP, which would then also allow me the potential to make further contributions if circumstances change for me. This also, I think, prevents the MPAA being triggered?
Are there any flaws in my thinking or have I missed anything else I should consider?
Transfer to a SIPP and then take your tax free 25% from the SIPP. It won't trigger the MPAA and the 'other' 75% is happily invested until you need to draw on it.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1 -
Marcon said:PostMetaller said:I am thinking about whether to cash-in my FSAVC at 55 in just over a couple of years.
It is currently worth about £17k with a projected annual income of around £500.
I am now a full-time carer, with little realistic opportunity to work at a level where I can make significant future pension contributions. I have a company pension scheme that starts at age 60 in excess of £18k pa and then further schemes at age 65 which will add another £5-6k pa. I will also be entitled to a full state-pension.
My thinking is this
(1) cash-in the FSAVC at 55 to take 25% tax-free cash (I believe that the FSAVC allows me to do this at 55, rather than 57)
(2) invest the balance into a SiPP, which would then also allow me the potential to make further contributions if circumstances change for me. This also, I think, prevents the MPAA being triggered?
Are there any flaws in my thinking or have I missed anything else I should consider?
Transfer to a SIPP and then take your tax free 25% from the SIPP. It won't trigger the MPAA and the 'other' 75% is happily invested until you need to draw on it.1
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