Using AVCs to purchase additional LGPS Pension

iantowelsh

Hi,

I’m 55 and hoping to retire when 60 (2030). I only have an LGPS pension with 36 years service by 2030.

My SSAVC pot is nearly at my 25% TFLS,

I’m not sure if I should carry on adding to my AVC pot (after reaching the TFLS) and using the excess money to purchase additional LGPS on retirement.

I’ve spoken to my pension department,  who informed me that any additional payments will provide an extra 4.3% (of the addition) to my yearly LGPS pension. I understand that my pension is index linked and will increase year on year.

I’m at a loss whether to carry on with the AVC payments or invest the money elsewhere after paying tax?

I welcome your wisdom.

Many thanks in advance.
Ian

Silvertabby

The AVC pension purchase factor is age related, but 4.3% sounds about right at 60.

The extra pension purchased will then increase each year by uncapped CPI.  

Could you get a better return by initally paying tax on your 'contributions' and investing them elsewhere?  Over to those on these boards with much more expertise in this field than me !

dunstonh

I’m at a loss whether to carry on with the AVC payments or invest the money elsewhere after paying tax?

1) S&S ISA
2) individual pension (SIPP, PPP or SHP)
3) LGPS additional pension
4) in-house AVC.

Each has its pros and cons but if you know your objectives, you should be able to position those in the correct order in terms of what is best (it may be a combination)

iantowelsh

Thanks for your quick responses.

@Silvertabby - thanks for confirming that 4.3% sounds correct.