avc's

bebop

I have £9000 in standard life avc's which on retirement ( in 7 years)they quote £360 per annum . I no longer contribute to them. Must i wait until retirement ? would i be able to have a lump sum? Any advice, cheersx

dunstonh

Are they AVCs or FSAVCs?

If AVC, then its linked to the occupational pension scheme and you can only commence them when that commences.

If FSAVC, you can commence them early if you are no longer a member of the occupational pension scheme.

Also, if FSAVC you normally cannot take a tax free lump sum (some exceptions and rules change from next April to allow it). However, you can transfer the FSAVC to a stakeholder pension and then take a tax free lump sum from that.

You must also remember, that pension schemes are best left as long as you can leave them. Annuity rates are based on age and the best rates dont start until you are over 60. Also, if its in the standard life with profits fund, if you commence the pension before demutualization next year (as expected) then you will not get a demutualization payout.

bebop

good advice, thanks.

david78

dunstonh wrote:

Also, if FSAVC you normally cannot take a tax free lump sum (some exceptions and rules change from next April to allow it). However, you can transfer the FSAVC to a stakeholder pension and then take a tax free lump sum from that.

Can you confirm this. One can transfer FSAVC's to Stakeholder pensions? Can I do this now (I can't have a stakeholder pension as I'm in an occupational scheme and earn "too much"), or would I have to wait 'till after next April.

My FSAVC is a unit linked one with Equitable life, and I would like to transfer it to try to get better performance. Only thing is no FSAVC provides are taking transfers in.

dunstonh

david78 wrote:

Can you confirm this. One can transfer FSAVC's to Stakeholder pensions? Can I do this now (I can't have a stakeholder pension as I'm in an occupational scheme and earn "too much"), or would I have to wait 'till after next April.

My FSAVC is a unit linked one with Equitable life, and I would like to transfer it to try to get better performance. Only thing is no FSAVC provides are taking transfers in.

You can transfer an FSAVC to stakeholder or personal pension when you are no longer in the occupational pension scheme that the the FSAVC is linked to.

In your case, you say you are in the occ scheme so the answer would be no for you (i'm afraid).

chatcat

Am I correct in my understanding that AVCs can be transferred to a SIPP post "A" day if the trustees of the occupational scheme the avc is linked to allow the link to be broken between the avc & occ scheme.

If my understanding is correct I can see no benefit for the trustees of an occupational pension scheme not allowing the switch or am I missing something ?

Seems attractive to me as would allow flexibility in when I take benefits from each fund.

Any clarification would be appreciated

Thanks
Chatcat

Pal

Noone knows if it will be possible because the rules are not out yet.

In practice it depends on how much work it is for the Trustees to allow it and whether it costs either the scheme or the company any money in administration fees and messing about with discharge forms etc.

The regulations are due out in January.