help avcs or isas

charlie11

This is my first post on this site, I am 53 years old, male married, and have worked in my present employer for 9 years,and been in there pension scheme 8 yrs (final salary) I hope I will be able to retire at 60 depending on income, I have approx £50000 in a standard life frozen pension, and 7 years in another works pension that is also frozen.I put £44 a month in avc1 and I am also in my works avcs2 which will get me 3 added years. My question is do I up my avc1 or do I start putting the money in isas? Sorry it is long winded I wanted to make sure you had all the details.

Charlie

dunstonh

I put £44 a month in avc1 and I am also in my works avcs2 which will get me 3 added years.

That cannot be correct. You can only contribute to your current employer's AVC and AVCs do not buy added years. They are money purchase.

Its probably the terminology you are using as you have mis-used the term frozen as well. Is the "avc1" a personal pension or what was an FSAVC? is "avc2" the "buying added years" option?

My question is do I up my avc1 or do I start putting the money in isas?

FSAVCs no longer exist and AVCs are heading the same way. AVCs are largely obsolete now and the restrictions they have mean that unless the employer enahances the AVC in any way or the AVC can be used to enhance the main scheme benefits, then its not worth going with an AVC.

Unfortunatly, we dont have anywhere near enough detail to tell you whats best and even if we did we couldnt as that is a regulated area. However, you need to look at the benefits of what you currently have and see if they match your aims or not. Then you need to look at your shortfalls. Is it income or capital. Is there tax benefits one way or another. How does your spouse's provision stack up compared to yours (i.e. is yours going to be well through the age allowance allowance maximum and you spouse has no pension income therefore costing you over £2000 a year in extra tax in retirement just because you paid the money and not your spouse)?

dasherman

dunstonh wrote: »

AVCs do not buy added years. They are money purchase.

Royal Mail run an added years AVC!

http://www.royalmailgroup.com/portal/rmg/content1?catId=23400517&mediaId=23800530

EdInvestor

charlie11 wrote: »

This is my first post on this site, I am 53 years old, male married, and have worked in my present employer for 9 years,and been in there pension scheme 8 yrs (final salary) I hope I will be able to retire at 60 depending on income, I have approx £50000 in a standard life frozen pension, and 7 years in another works pension that is also frozen.I put £44 a month in avc1 and I am also in my works avcs2 which will get me 3 added years. My question is do I up my avc1 or do I start putting the money in isas? Sorry it is long winded I wanted to make sure you had all the details.

Charlie

You need to collect some information.
First write to all the pension companies and ask for a forecast of the income at retirement (note final salary pensions increase annually by inflation or 5%). Inquire how much tax free cash you will be able to take as well.

Also check your likely state pension amount
https://www.thepensionservice.gov.uk

... and sort out the AVC issue.

Also look at your wife's state and other pensions, bearing in mind that at 65 you will both have a tax free allowance of 10k each.It may be more sensible to contribute extra money to a pension for her, rather than another one for you, especially if your pension income is projected at anything near the 20k.pa. level.

Once you know about your likely incomes/tax free cash, you can decide whether to put extra money into ISAs or pensions, and in which name.