Keep AVC or take the money and run?

Applesarefree

I have a smallish  Teacher AVC of a predicted £16500 ( which I am very grateful for), It is due to mature( not sure if this is the correct word) in 6 months. I'm thinking of taking all the money but have noticed its predicted value seems to have gone up a lot in the last year, a fair bit more than if I put it in a savings account. Would it make sense for me to leave it there  or take the money and run?

NickPoole

Can you move to drawdown and take 25% Tax Free Cash?

Marcon

Applesarefree said:

I have a smallish  Teacher AVC of a predicted £16500 ( which I am very grateful for), It is due to mature( not sure if this is the correct word) in 6 months. I'm thinking of taking all the money but have noticed its predicted value seems to have gone up a lot in the last year, a fair bit more than if I put it in a savings account. 

It's already in a savings account - and the choice of fund is what has driven growth. Had you invested in an identical fund within an ISA you'd have had the same growth, because they are both tax-favoured environments in terms of funds held within them.

Applesarefree said:

Would it make sense for me to leave it there  or take the money and run?

What's your objective? Taking the course of action most likely to help you achieve this is what would 'make sense', surely?

Applesarefree

Yes I can, but would it be worth it if I'm getting more than 4% by leaving it in AVC?

Applesarefree

Marcon said:

Applesarefree said:

I have a smallish  Teacher AVC of a predicted £16500 ( which I am very grateful for), It is due to mature( not sure if this is the correct word) in 6 months. I'm thinking of taking all the money but have noticed its predicted value seems to have gone up a lot in the last year, a fair bit more than if I put it in a savings account. 

It's already in a savings account - and the choice of fund is what has driven growth. Had you invested in an identical fund within an ISA you'd have had the same growth, because they are both tax-favoured environments in terms of funds held within them.

Applesarefree said:

Would it make sense for me to leave it there  or take the money and run?

What's your objective? Taking the course of action most likely to help you achieve this is what would 'make sense', surely?

I'm taking early retirement and looking to maximise every penny, so basically just trying to earn as much as I can from the 16,500.

Marcon

Applesarefree said:

Marcon said:

Applesarefree said:

I have a smallish  Teacher AVC of a predicted £16500 ( which I am very grateful for), It is due to mature( not sure if this is the correct word) in 6 months. I'm thinking of taking all the money but have noticed its predicted value seems to have gone up a lot in the last year, a fair bit more than if I put it in a savings account. 

It's already in a savings account - and the choice of fund is what has driven growth. Had you invested in an identical fund within an ISA you'd have had the same growth, because they are both tax-favoured environments in terms of funds held within them.

Applesarefree said:

Would it make sense for me to leave it there  or take the money and run?

What's your objective? Taking the course of action most likely to help you achieve this is what would 'make sense', surely?

I'm taking early retirement and looking to maximise every penny, so basically just trying to earn as much as I can from the 16,500.

How much of it would be taxable if you took the whole lot - have you factored that into your thinking?

Applesarefree

Marcon said:

Applesarefree said:

Marcon said:

Applesarefree said:

I have a smallish  Teacher AVC of a predicted £16500 ( which I am very grateful for), It is due to mature( not sure if this is the correct word) in 6 months. I'm thinking of taking all the money but have noticed its predicted value seems to have gone up a lot in the last year, a fair bit more than if I put it in a savings account. 

It's already in a savings account - and the choice of fund is what has driven growth. Had you invested in an identical fund within an ISA you'd have had the same growth, because they are both tax-favoured environments in terms of funds held within them.

Applesarefree said:

Would it make sense for me to leave it there  or take the money and run?

What's your objective? Taking the course of action most likely to help you achieve this is what would 'make sense', surely?

I'm taking early retirement and looking to maximise every penny, so basically just trying to earn as much as I can from the 16,500.

How much of it would be taxable if you took the whole lot - have you factored that into your thinking?

No I haven't thought about that, I'll look into it, thanks .

dunstonh

 It is due to mature( not sure if this is the correct word) in 6 months. 

The maturity age on legacy plans is age 75.   On modern plans there is no maturity age.
It is possible you are referring to the scheme age but that is just for statement projections and a prompt to you.  It doesn't mean it needs to mature (unless its a legacy plan at age 75!)

I'm thinking of taking all the money but have noticed its predicted value seems to have gone up a lot in the last year, a fair bit more than if I put it in a savings account. Would it make sense for me to leave it there  or take the money and run?

Why would you take it out of a tax free shelter (no internal taxation) and pay income tax on the draw when it is invested and likely consistently beating cash savings?

Applesarefree

dunstonh said:

 It is due to mature( not sure if this is the correct word) in 6 months. 

The maturity age on legacy plans is age 75.   On modern plans there is no maturity age.
It is possible you are referring to the scheme age but that is just for statement projections and a prompt to you.  It doesn't mean it needs to mature (unless its a legacy plan at age 75!)

I'm thinking of taking all the money but have noticed its predicted value seems to have gone up a lot in the last year, a fair bit more than if I put it in a savings account. Would it make sense for me to leave it there  or take the money and run?

Why would you take it out of a tax free shelter (no internal taxation) and pay income tax on the draw when it is invested and likely consistently beating cash savings?

Thanks for the information. Yes, I'll likely eave it in for a few years.

Eldi_Dos

What would be the normal process when a legacy plan reaches maturity stage ?

DRS1

Maybe I am being thick but doesn't what you do with the AVC depend on what you do with the main Teacher's pension?  If you are going to be starting the main pension then why would you leave the AVC behind?  Aren't there things you can do with the two together that you could not do (or not do as well) with them separately?