Carry on paying into Pension? 25% TFLS fully funded.

Ducatiandy

Hi all, should I carry on paying into my pension if the 25% lump sum is fully funded? I know I get 40% tax relief. I'm also trying to manage the annual allowance.

My Company pension which I could have taken from age 50 is managed by WTW, I am currently 54 and thinking of retiring in the next 18months – 2 years (currently 28 years into a 30 year DB scheme). The pension is a DB final salary with linked DC for my AVC’s thru Lifesight (also WTW). I can therefore take 25% TFLS and my current standings are that I have maxed out the AVC’s to cover the 25% from the combined pot.

I currently contribute 10% of my weekly pay (£72k annual), which was more but I was limited to the £40k annual allowance (the company capped it for me for the 3 years) in 2019-20,2020-21 and 20221-22. I have some annual allowance left over for the last 2 years (and now its at £60k). It sounds like I was paying a lot in but it was the gain of my AVC’s over the year plus the 1/16 rate of added contributions.

Rates for my leaving at 55 (next april) with a Current Lifesight DC value of £244k are:

Option a (Pension including the additional Company pension only no lump sum) Company pension and an additional Company pension of £4001.76 a year is available in exchange for a reduction in your Company pension at State Pension Age of £8250.96 a year

 £ 37108.80

and a joint life level annuity in the Retirement Plan funded by your transferred-in total LifeSight Account

£14995.08

Option c (Lump sum and pension including the additional Company pension) Lump sum from the LifeSight Account £ 220713.60 Total lump sum £ 220713.60

Plus Residual Company pension and an additional Company pension of £4001.76 a year is available in exchange for a reduction in your Company pension at State Pension Age of £8250.96 a year.

£ 37109.04

The balance of your LifeSight Account of £32327.61 will remain in LifeSight.

The estimated value of your full pension from the Retirement Plan for testing against your lifetime allowance is £962894.40 . This is 89.73 % of the standard lifetime allowance for the current tax year.

I am looking to take option c at £220k TFLS, the enhanced Company pension of £37109 year leaving £32k invested in my self selected funds Lifesight account.

My OH (age 52) has a Council pension that was final salary until 2014, now it’s a career average, current figures for her retiring at 55 are TFLS of £12591 and pension of £6897pa.

Except for a few £k in shares and £11k in this years S&S ISA our money is tied up in classic cars and house.

Should I ramp up my AVC contribution rate again to the max equivalent £60k annual allowance rate or even more, bearing in mind I have overfunded my TFLS against the total pot, and would have to leave the £32k+ excess invested for drawdown later and full tax or take an annuity at the time, or look at other ways of adding to my OH’s pension, or ISA’s etc. Thanks