Taking AVC LGPS

Pipkin1812

Hi. I am looking into taking early retirement now I’ve turned 60. My pension would be around £24K pa with an automatic lump sum of £44K. I won’t commute any pension as I also have an AVC worth £30k which I would like to take as tax free cash. Are there any limits on how much tax free cash I can take? Thanks

Dazed_and_C0nfused

Pipkin1812 said:

Hi. I am looking into taking early retirement now I’ve turned 60. My pension would be around £24K pa with an automatic lump sum of £44K. I won’t commute any pension as I also have an AVC worth £30k which I would like to take as tax free cash. Are there any limits on how much tax free cash I can take? Thanks

There is yes.  But I suspect you are likely to find you can you can take the automatic £44k plus the whole AVC of £30k as tax free cash.

There is a calculator here.

https://www.lgpsmember.org/help-and-support/tools-and-calculators/lump-sum-calculator/

Pipkin1812

Thank you @Dazed_and_C0nfused. I tried the calculator and it looks like there is headroom for TFC up to £116k (I wish😆). Does this sound right? My plan would be to max out an ISA in the new financial year and put the rest into premium bonds then pay into an ISA each year from there. Is this a sound plan? My only other thought was whether I could pay into my small SIPP but not sure if I would fall foul of the recycling rules. Or could I pay into that so long as I used savings and not any of the TFC? Thank you