Fixed Annuity or drawdown

Maria2512

Hi,

just when I was convinced an annuity was the way to go, drawdown has reared its head, which I know nothing about! I am trying to work if there any tax advantages on either choice. 

100k AVC pot
5 year Fixed Annuity or drawdown(over 5 years)?
work pension 22k
tax code 1257L

i like the certainty of the 5 year fixed annuity but not sure I’ll be utilising all my tax allowances correctly. Or am I overthinking it?

Any comments/pointers?

Thanks 

DRS1

Have you got other income?
Why did you pick 5 years?  Is that to get you to state pension age?  Or is it to give you £20k pa which you can add to an ISA?
Is the AVC linked to the work pension?  Do they interact in any way - eg LGPS allows you to maybe take all the AVC as a tax free lump sum at the same time as you take the main scheme pension.

Maria2512

@DRS1 The 5 years is to bridge a gap. It is linked to a lgps work pension. 

DRS1

Someone like @Silvertabby would know how LGPS AVCs work - especially if they do drawdown.  I have a notion that to the extent they are not used for tax free cash they usually buy extra scheme pension (ie spread over the rest of your life not just 5 years).

Maybe to do drawdown would require a transfer?

Drawdown can be simple but does raise the issue of how do you invest.  For a short period like 5 years you would probably want it in cash (a STMMF perhaps).

I wonder if you have looked at the figures for drawing the main pension 5 years early with the AVC as tax free cash to the extent allowed and boosting the pension if you can't use it all as tax free cash?