LGPS AVC Lump Sum Overshoot

John905

Quick question. My good news is that it seems I am set to significantly overshoot my maximum tax free AVC lump sum that I can take when I retire and take my LGPS pension later this year. Am I right in thinking that I will simply pay income tax on this excess amount? My plan is take as much as possible now, while making sure I don't hit the higher rate of income tax. Anything that would take me into the higher tax bracket I plan to use to buy additional pension. My logic is that I will end up paying tax on the additional pension anyway, so as long as I'm not paying the higher tax rate on my lump sum I would be as well taking it now. I'm also continuing to pay into the AVC for the next 3/4 months, my thinking here is that as we are lucky enough to have salary sacrifice, even if my tax savings will be effectively wiped out, I can still benefit from the NI savings. Have I missed any potential pitfalls?

MX5huggy

The way describe this is not an option. 

You can take the maximum amount tax free.  you can buy additional pension with the remainder. 

You can move the AVC to another scheme that allows drawdown which would allow you to take what you want. But you probably can’t do that without reducing the tax free amount you can have.