Ready to press the DB pension button... but what about the AVCs?

daydream007

I'm acutely aware of the time people take to help others on here, and am grateful for every single bit of advice I've had. Thank you. 

However, I have one more question, please:

I'm ready to press the button to trigger my BT (where I no longer work) pension to begin paying in December. I'm going to take what appears to be the minimum cash free lump sum (there isn't an option for zero) of £15,000. However, what I'm confused about is the remaining, albeit relatively small pot of AVCs: £7,218.

It suggests I can only(?) use them to take a cash lump sum (see screenshot) or transfer them out. Now, for some reason I had expected to be able to take it all as cash free given I'd gone for the lowest CFLS from the pension aspect. 

Flummoxed as what to do now; suck up the tax (if it's a thing) or transfer to the AVC plan I hold with my current employer. 

As ever, thank you for any sage advice.   

 

Marcon

Are you in the Section C part of the BT scheme?

If so, I think you've ticked the box for 'standard scheme benefits' (which includes some 'automatic' tax free cash for Section C members) and that's what's causing the confusion. I've just looked at the online member booklet https://www.btps.co.uk/MediaArchive/SchemeSite/BTPS_Member_Booklet_Section_C.pdf and under the scheme rules you should be able to use your AVCs to take further tax free cash (unless you've already had a major payout from another scheme, which from your post doesn't sound likely!):



Have a look at pages 4 and 5 of https://btps.co.uk/MediaArchive/SchemeDocuments/BTPS%20Your%20Pension%20Guide%20for%20members%20with%20AVCs.pdf and then try asking for a quote based on 'maximum tax free cash' and see what happens.

daydream007

Marcon said:

Are you in the Section C part of the BT scheme?

If so, I think you've ticked the box for 'standard scheme benefits' (which includes some 'automatic' tax free cash for Section C members) and that's what's causing the confusion. I've just looked at the online member booklet https://www.btps.co.uk/MediaArchive/SchemeSite/BTPS_Member_Booklet_Section_C.pdf and under the scheme rules you should be able to use your AVCs to take further tax free cash (unless you've already had a major payout from another scheme, which from your post doesn't sound likely!):



Have a look at pages 4 and 5 of https://btps.co.uk/MediaArchive/SchemeDocuments/BTPS%20Your%20Pension%20Guide%20for%20members%20with%20AVCs.pdf and then try asking for a quote based on 'maximum tax free cash' and see what happens.

(Needless to say) You were spot on. I've just ran a new quote with 'customised options' - added the AVC pot to the cash free lump sum I wanted and, hey presto - job done; AVCs gone. 

Thank you.