AVC and TFLS

Dizzyb99

Apologies in advance for the long post and for any repetition from a previous post.
 I am 60 and my husband 71. I always intended to retire if possible in my early 60's so we would have some quality time together. I have been offered a severance package of 36,000 which I am more than happy to take, and intend to take my pension as soon as I finish work, I just want to check that I have my other figures correct in figuring out my TFLS allowance and how I can use my AVC
My annual pension will be 19,000 with a TFLS of 15,700 and AVC of 2,500.

In my head the calculation is:
19000 x 20 +15,700 + 2,500 = 398,200 divided by 4 = TFLS of up to 99,550

I have been told from payroll/pensions that I can commute my AVC to increase my TFLS
2,500 x 12 = 30,000
30,000 + 15,700 = 47,000

I also have some additional savings and was wondering if I can put a lump sum of 4,000 into the AVC and commute this also, which would then give me a TFLS of 95,000.

I'm pretty sure this is a bit too good to be true, (my husband calls it Dizzyb maths) which was why I thought I would ask the experts on here.
Any help/guidance at all would be greatly appreciated

Marcon

Dizzyb99 said:

Apologies in advance for the long post and for any repetition from a previous post.
 I am 60 and my husband 71. I always intended to retire if possible in my early 60's so we would have some quality time together. I have been offered a severance package of 36,000 which I am more than happy to take, and intend to take my pension as soon as I finish work, I just want to check that I have my other figures correct in figuring out my TFLS allowance and how I can use my AVC
My annual pension will be 19,000 with a TFLS of 15,700 and AVC of 2,500.

In my head the calculation is:
19000 x 20 +15,700 + 2,500 = 398,200 divided by 4 = TFLS of up to 99,550

I have been told from payroll/pensions that I can commute my AVC to increase my TFLS
2,500 x 12 = 30,000
30,000 + 15,700 = 47,000

I also have some additional savings and was wondering if I can put a lump sum of 4,000 into the AVC and commute this also, which would then give me a TFLS of 95,000.

I'm pretty sure this is a bit too good to be true, (my husband calls it Dizzyb maths) which was why I thought I would ask the experts on here.
Any help/guidance at all would be greatly appreciated

If your AVC currently stands at £2,500 then that's what you'd get by way of tax free cash from your AVC 'pot'. On the other hand, if you are saying that your AVC would 'buy' scheme pension of £2,500 a year, that's where the 2,500 x 12 = £30,000 comes from (and not a great commutation rate if you only get £12 for each £1 of pension given up).

If you put a lump sum of £4K into your AVC, I'm afraid it doesn't magically morph into a lump sum of 12 times that amount overnight. If it did, you've found the magic money tree!

Dizzyb99

Thank you Macron

'If you put a lump sum of £4K into your AVC, I'm afraid it doesn't magically morph into a lump sum of 12 times that amount overnight. If it did, you've found the magic money tree!' 

As I said Dizzyb maths  A girl can try.