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    • Dandytf
    • By Dandytf 9th May 18, 7:42 PM
    • 1,225Posts
    • 403Thanks
    Dandytf
    +5% or AVC's
    • #1
    • 9th May 18, 7:42 PM
    +5% or AVC's 9th May 18 at 7:42 PM
    Simple questions as I've decided to stay part time permanently.
    My recent few years employee DC plan is going to be depleted in a few year with potential return amount (thinking ahead as I'm only 45)
    Anyway I had raised from standard 1% to5% contributions -matched by employers.
    To increase my potential return if and when I retire.
    Is it financially more sensible if I increase above 5% (no additional match from employers above 5%)
    Or maybe AVC's could make more sense -though I've no idea of AVC's-do I choose new % or amount payable from salary each month.
    Thanks in advance mser;s -note sure if my question is valid.
    sc dmp 2012 13k
    Jan 2018 8840 paid. 60% approx.
Page 1
    • dunstonh
    • By dunstonh 9th May 18, 8:22 PM
    • 92,613 Posts
    • 59,931 Thanks
    dunstonh
    • #2
    • 9th May 18, 8:22 PM
    • #2
    • 9th May 18, 8:22 PM
    Is it financially more sensible if I increase above 5% (no additional match from employers above 5%)
    Any extra is good.

    Or maybe AVC's could make more sense -though I've no idea of AVC's-do I choose new % or amount payable from salary each month.
    Most firms no longer offer AVCs (the requirement to offer them ended in 2006). And most money purchase occupational pensions didnt have AVCs to begin with as they could handle any increases in the main scheme.

    Nowadays, its mainly individual schemes (PPP, SHP or SIPP) vs AVC or in-house hybrid scheme. Sometimes ISAs come into play too.

    it all comes down to tax position - now and future - and what in-house option exists (and what it offers) vs the individual options you can use.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Dandytf
    • By Dandytf 9th May 18, 9:09 PM
    • 1,225 Posts
    • 403 Thanks
    Dandytf
    • #3
    • 9th May 18, 9:09 PM
    • #3
    • 9th May 18, 9:09 PM
    With current employers DC scheme my combined level is 15% 5% from me 10% from employers.
    I'm unable to increase this without using avc's
    What I've decided tonight is +5% avc's in effect doubling my contributions.
    At least it's something.
    Thanks mser's
    sc dmp 2012 13k
    Jan 2018 8840 paid. 60% approx.
    • Dandytf
    • By Dandytf 9th May 18, 9:34 PM
    • 1,225 Posts
    • 403 Thanks
    Dandytf
    • #4
    • 9th May 18, 9:34 PM
    • #4
    • 9th May 18, 9:34 PM
    Any extra is good.

    Most firms no longer offer AVCs (the requirement to offer them ended in 2006). And most money purchase occupational pensions didnt have AVCs to begin with as they could handle any increases in the main scheme.

    Nowadays, its mainly individual schemes (PPP, SHP or SIPP) vs AVC or in-house hybrid scheme. Sometimes ISAs come into play too.

    it all comes down to tax position - now and future - and what in-house option exists (and what it offers) vs the individual options you can use.
    Originally posted by dunstonh
    I pay very little tax whilst part time-hope my pension contributions doesn't effect tax though I'm certainly not investing anywhere near 40k per annum
    sc dmp 2012 13k
    Jan 2018 8840 paid. 60% approx.
    • Dox
    • By Dox 10th May 18, 12:33 AM
    • 515 Posts
    • 306 Thanks
    Dox
    • #5
    • 10th May 18, 12:33 AM
    • #5
    • 10th May 18, 12:33 AM
    I pay very little tax whilst part time-hope my pension contributions doesn't effect tax though I'm certainly not investing anywhere near 40k per annum
    Originally posted by Dandytf
    Please don't 'hope' - just check! You will still get full tax relief on your contributions provided that your contributions + your employer's contributions + tax relief don't exceed your earnings in the tax year. By the sound of it they won't. The pension provider will reclaim tax at basic rate (even if you haven't actually paid any) and add this to your 'pot'.
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