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  • FIRST POST
    • bilbobagginz71
    • By bilbobagginz71 16th May 19, 5:57 PM
    • 3Posts
    • 0Thanks
    bilbobagginz71
    Very Small AVC transferred 20 years ago
    • #1
    • 16th May 19, 5:57 PM
    Very Small AVC transferred 20 years ago 16th May 19 at 5:57 PM
    I had an AVC from a previous employer worth £400. I transferred it my new employer when I started with them 20 years ago. Itís worth about £500 now. I get a yearly update letter saying when I retire at 65 in 18 years time I will receive a pension of £14 per year. I would need to live to another 35 years to get anywhere near the amount the fund is worth. My question is are AVCs worth it? Is there anything I can do with this instead of such a small return? Can I take a 25% lump sum, would that be roughly £125 based on its current value? I was thinking to start paying into a new AVC but donít think itís worth it even with tax relief on contributions. Any inputs appreciated.
Page 1
    • FatherAbraham
    • By FatherAbraham 16th May 19, 7:26 PM
    • 978 Posts
    • 740 Thanks
    FatherAbraham
    • #2
    • 16th May 19, 7:26 PM
    • #2
    • 16th May 19, 7:26 PM
    I had an AVC from a previous employer worth £400. I transferred it my new employer when I started with them 20 years ago. Itís worth about £500 now. I get a yearly update letter saying when I retire at 65 in 18 years time I will receive a pension of £14 per year. I would need to live to another 35 years to get anywhere near the amount the fund is worth. My question is are AVCs worth it? Is there anything I can do with this instead of such a small return? Can I take a 25% lump sum, would that be roughly £125 based on its current value? I was thinking to start paying into a new AVC but donít think itís worth it even with tax relief on contributions. Any inputs appreciated.
    Originally posted by bilbobagginz71
    What assets have you got the AVC fund invested in? Perhaps you need to move it to a higher return, higher risk investment.
    Thus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...
    THE WAY TO WEALTH, Benjamin Franklin, 1758 AD
    • bilbobagginz71
    • By bilbobagginz71 17th May 19, 5:29 AM
    • 3 Posts
    • 0 Thanks
    bilbobagginz71
    • #3
    • 17th May 19, 5:29 AM
    • #3
    • 17th May 19, 5:29 AM
    It’s spread across uk, us, Europe, and a couple of other funds. I just wonder is it normal for whatever the total is to only get a return of 3% of it when I retire? I’ll look to other funds, the management fees chew up most of the gains. Can I just withdraw it all at age 65?
    • MallyGirl
    • By MallyGirl 17th May 19, 6:06 AM
    • 3,647 Posts
    • 9,051 Thanks
    MallyGirl
    • #4
    • 17th May 19, 6:06 AM
    • #4
    • 17th May 19, 6:06 AM
    You can withdraw it all but only 25% would be tax free. The remaining 75% would be added to any other income/ pension and would be liable for tax.

    Projections are always pessimistic and based on the returns from an annuity bought with the money. 3ish % is a reasonable figure to work on as income without eroding the capital but the numbers are so small that it just needs to be added in to your overall pension portfolio and treated the same as the rest.
    • FatherAbraham
    • By FatherAbraham 17th May 19, 6:10 AM
    • 978 Posts
    • 740 Thanks
    FatherAbraham
    • #5
    • 17th May 19, 6:10 AM
    • #5
    • 17th May 19, 6:10 AM
    Itís spread across uk, us, Europe, and a couple of other funds. I just wonder is it normal for whatever the total is to only get a return of 3% of it when I retire? Iíll look to other funds, the management fees chew up most of the gains. Can I just withdraw it all at age 65?
    Originally posted by bilbobagginz71
    Withdraw it?

    Don't you need it, as part of your overall retirement-income provision?
    Thus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...
    THE WAY TO WEALTH, Benjamin Franklin, 1758 AD
    • jaybeetoo
    • By jaybeetoo 17th May 19, 8:01 AM
    • 812 Posts
    • 418 Thanks
    jaybeetoo
    • #6
    • 17th May 19, 8:01 AM
    • #6
    • 17th May 19, 8:01 AM
    Withdraw it?

    Don't you need it, as part of your overall retirement-income provision?
    Originally posted by FatherAbraham
    I donít think £500 is going to make much difference to his retirement lifestyle!
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