Nest Pension/Prudential AVC

ade1970

Hi there.
I'm currently in the LGPS (32 years).
I also pay into AVCs with the Prudential (3 years). I have a second job with a Nest pension (Sharia Fund). I will be reducing my hours around March time on this second job. This will put me below the threshold of £6,240 for the next tax year. Am I correct in thinking this will mean no more employer/employee contributions?
If I have that bit right, from what I can gather I can then transfer the Nest pension out. Could I transfer this to the Prudential AVC? Struggling online to find out any information.
If not what can I do with it? There is only around 4.5k in the Nest, it's not going to go far even with exceptional growth if I left it alone. I've run a pension forecast on that amount to end in 12 years. Comes out at £1.5k lump sum and £320 a year before tax. A princely sum of £21 a month after tax in 12 years, that will go far!
I could take a hit on withdrawing it taking the tax hit and drip feeding into the AVC. I've ruled a SIPP out as I keep increasing my AVC contributions. Possibly my S&S ISA but I think the AVC route is far better if possible.
In 5 years I will be 60, the plan is to retire then.

Any ideas/suggestions would be most welcome.

Thanks for reading.

AlanP_2

No point withdrawing it and taking a tax hit if you don't need the money.

Why not just leave it there and let it grow quietly (hopefully) in the background and decide nearer the time?

You can just withdraw in 1 or 2 transactions at the time you want it, splitting across tax years for example, to minimise tax. You don't have to take it as a monthly / annual pension.

You could use it to fund a few months of retirement before starting your LGPS for example thus reducing the actuarial reduction for going at 60.

Albermarle

The £6240 is only the level below where an employer is not forced to contribute. A nice employer may decide to keep contributing.
In either case there is nothing to stop you contributing, if you want to.

MX5huggy

Are you contributing to the AVC via Salary Sacrifice? That makes it by far the best option for increasing your pensions, considering that you’ll likely to get it out tax free using it for LGPS tax free lump sum. 

As said they might keep paying into the nest. You can’t directly transfer it to the AVC, you could take it then increase your AVC contributions but that is a bad plan for the small amount and it would trigger MPAA which could result in not being able to contribute as much as you want in the future. 

The nest fees are fairly unique in that that charge 1.8% for new contributions (which is high) but the ongoing fee of 0.3% is competitive. So I would just keep it. When you take it you don’t have to set up an annual pension take 25% tax free then take via drawdown the rest over 1 or 2 tax years to only pay 20% tax on it. 

ade1970

Unfortunately the council I work for don't do salary sacrifice, despite me asking several times to the powers that be if they would. I like the idea of using the Nest pension to fund a few months of retirement before starting my LGPS.
Some great informative replies, thanks