When to take LGPS pension

Ebeneezer9

I am due to retire 21 March, my NRA, I would like to know if it is beneficial to put off taking my LGPS pension by ten days so that I get a full year of service as my final contributing year. I have an in house AVC that runs with my pension and want to take this tax free when I take my LGPS and want to make sure I don’t jeopardise losing the tax free status. 

QrizB

Are you asking about delaying your retirement? Or to still leave employment on the 21st, but not claim your pension until the 31st? 

daveyjp

Far too little info to provide any meaningful advice.  Your AVC is 100% tax free regardless, but it is subject to a maximum amount which is based on your LGPS pension, so knowing that maximum AVC figure is important.

There is also the decision to make on on whether to draw pension from 6th April so you do so at the start of a new tax year.  Again that depends on personal financial circumstances.

Dazed_and_C0nfused

daveyjp said:

Far too little info to provide any meaningful advice.  Your AVC is 100% tax free regardless, but it is subject to a maximum amount which is based on your LGPS pension, so knowing that maximum AVC figure is important.

There is also the decision to make on on whether to draw pension from 6th April so you do so at the start of a new tax year.  Again that depends on personal financial circumstances.

I'm not sure regardless is quite right.  I was under the, possibly mistaken, impression it had to be taken at the exact same time as the DB element started (to get more than 25% tax free).

And could waiting for the April 2025 revaluation be something worth considering?

Laycity

Are you due an annual pay rise in April in your current role? If so any final salary elements (pre 2008 or possible McCloud adjustments) you have will be based on this increased salary which may be beneficial. 

Silvertabby

Laycity said:

Are you due an annual pay rise in April in your current role? If so any final salary elements (pre 2008 or possible McCloud adjustments) you have will be based on this increased salary which may be beneficial. 

Pre 2014 pensionable pay is based on the previous 365 days earnings, so leaving a couple of days after a 1April payrise will result in an increase of - literally - pennies.

Changing the date of retirement in order to benefit from the April revaluation may be worth considering.  But -  not rattling any cages here - If your tax free lump sum/AVC is considerably higher than average, then you may wish to leave your final before/after April retirement decision until after the October budget.

Ebeneezer9

Silvertabby said:

Laycity said:

Are you due an annual pay rise in April in your current role? If so any final salary elements (pre 2008 or possible McCloud adjustments) you have will be based on this increased salary which may be beneficial. 

Pre 2008 pensionable pay is based on the previous 365 days earnings, so leaving a couple of days after a 1April payrise will result in an increase of - literally - pennies.

Changing the date of retirement in order to benefit from the April revaluation may be worth considering.  But -  not rattling any cages here - If your tax free lump sum/AVC is considerably higher than average, then you may wish to leave your final before/after April retirement decision until after the October budget.

Thank you Silvertabby, I will only have 15 pensionable years when I retire (2012-2027) so I assume going on 21/3 will make no difference to seeing out a full tax year.  I just hope nothing changes regarding taking AVC tax free !

DRS1

Ignorant question but how can you have pensionable years up to 2027 if you retire in early 2026?