LGPS and AVC queries

hippydip

Hi, I've just been looking through my pension forecasts. I'm hoping to retire in 9 years time - 60 years old. I'll have a LGPS of £23,000 approx per year. I've just started to pay more towards my AVCs in the hope that I'll have a pot of £75,000 ish when I retire which I can take as a tax free lump sum. I'm thinking that I'll have my pension and pay myself around £1000 per month until my state pension kicks in. I reckon I'll only be a couple of hundred pounds short of what I have now as disposable income, does that seem like a good plan? I should be mortgage and debt free when I retire. it's tricky isn't it knowing whether to take larger lump sum or higher longer term pension

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/6662076/lgps-and-avc-queries

Is your £200 factoring in that you won't be paying the LGPS pension contributions or any National Insurance on your pension income?

SarahB16

I'll have a LGPS of £23,000 approx per year. 

If you take this LGPS pension at age 60 have you calculated that your £23,000 per year is after your actuarial reduction as you are taking this 7 years before you reach the state pension age.

daveyjp

Rather than cash in and spend the AVC pot over 7 years so, consider a lump sum contribution to buy extra LGPS income. It may be less income per year at first, but it is forever and inflation linked.

As your LGPS will have an early payment reduction the AVC could go someway to offsetting that lower pension.

Do you have pre 2008 membership and an LGPS lump sum?

SarahB16

I'm hoping to retire in 9 years time - 60 years old.

When you have provided us with more information we can refine our suggestions but you may prefer to take your LGPS pension and AVC (excellent idea to have the AVC as it is very tax efficient) a few years later (say aged 63 or 64) and open a SIPP and use that to fund you from age 60 to say 63/64. This would mean you would have a lower actuarial reduction on your LGS pension.