People's pension AVC's

ronsglider

Hi All, New to the forum. I am semi Retired but still work P/T. My employer stops Pension contributions which go into my People's Pension pot. I am paying appropriately £200 extra AVC's a month.
Am I better off doing this or putting it into a regular savings account.
I can't see anything  on PP website about interest earnings.
Thanks in advance.

Albermarle

You should be getting tax relief on those £200 contributions, although how you get it depends on how you pay them.
Are they taken from your pay by your employer? or are you adding them independently ?
The money in PP will be invested ( not in a savings type account) so there is no interest but in the long term you should see the investments grow ( with some ups and downs along the way).

Mr_Benn

Hello Ron.  I also make extra AVC from my pay into my workplace pension.  It took me a while to get my head round it.

Your company should be taking the £200 from your wage before it starts deducting any tax.  Which means £200 goes into your pension. 

If they did it after working out the tax on your £200 you would only get £160  (£200 minus 20% tax). So you are making £40 in a way. 

Of course, the downside is when you come to take your pension you may have to pay tax on it then.  (The net result is you make 6%) .    Also, of course the Peoples Pension invest your money, and hopefully it grows as well. And hopefully above the 4% you would get in a savings account.

dunstonh

Peoples pension don't offer an AVC.   Its a master trust scheme.     If you pay extra into it, its not an AVC.

Am I better off doing this or putting it into a regular savings account.

In most cases, using the pension wrapper is more effective due to tax relief.

I can't see anything  on PP website about interest earnings.

That is because they are not a bank.  They are a pension provider.  They don't pay interest.   You invest in funds and its the funds that have the investment returns.

penners324

People's Pension is a pension scheme not an AVC scheme. AVC would be an additional scheme on top of a Defined Benefit pension.

PP are likely to add 25% tax contributions to the money you put in. Look at fund performance, the money is invested in various stock markets. No interest is paid.

finallyfree23

Unfortunately People’s Pension and a few others (Now springs to mind) like to cause unnecessary confusion by using terms to mean different things - they refer to additional contributions over and above automatic enrolment payments as AVC’s. https://thepeoplespension.co.uk/jargonbuster/additional-voluntary-contributions-avcs/

Now even detail them on the online account as a separate AVC “pot” despite them just being additional contributions alongside the other DC contributions being made by employer/employee.