What to do when over 25% Lump Sum

Hawkey99 · Post by **Hawkey99** » 28 Jun 2019, 19:59

Thanks for that Robert.

You have made some great plans.

However could you comment on whether it may be worth paying into an AVC just for PSE benefits. Im same as you and over the 25% AVC tax free amount..

Cheers

mark.cup · Post by **mark.cup** » 28 Jun 2019, 20:01

I'm sure you have asked the question but it seems silly that in this day and age you can't just transfer out any excess over and above the 25% tax free element even if it was a rough guess

Post by **RobertT** » 28 Jun 2019, 20:10

Hawkey99 wrote:Thanks for that Robert.

You have made some great plans.

However could you comment on whether it may be worth paying into an AVC just for PSE benefits. Im same as you and over the 25% AVC tax free amount..

Cheers

PSE gives you an extra incentive to save into AVC's, but depending on how you access any excess, you could pay 20% or potentially even 40% tax on the way out.

So in my opinion it's best to stick as close to 25% if possible.

Post by **RobertT** » 28 Jun 2019, 20:11

mark.cup wrote:I'm sure you have asked the question but it seems silly that in this day and age you can't just transfer out any excess over and above the 25% tax free element even if it was a rough guess

I have asked the question and it's not possible to transfer any excess out. The only options are:

Take a taxable lump sum.
Buy an annuity if the excess is over £1,000.
Commute to more pension if excess is under £1,000.

Or else think ahead and transfer out your whole balance, while still giving yourself enough time to build it back up to 25%.

Hawkey99 · Post by **Hawkey99** » 29 Jun 2019, 10:19

When you take your NRA 60 and your AVC money I assume there is no difference in taking your Bonus Plan or Flexiplan.

I beleive you can start a new flexiplan but can you start a Bonus plan ?

Many thanks

Post by **RobertT** » 29 Jun 2019, 13:27

Hawkey99 wrote:When you take your NRA 60 and your AVC money I assume there is no difference in taking your Bonus Plan or Flexiplan.

I beleive you can start a new flexiplan but can you start a Bonus plan ?

Many thanks

Yes.

Snurgs · Post by **Snurgs** » 30 Jun 2019, 16:46

Where can i find a definitive figure for calculating when i would be at the 25% stage with AVCs . I can see clearly what i have saved in AVCs but the main pension pot is all a bit confusing with so many changes they've made .

Post by **RobertT** » 30 Jun 2019, 16:51

Snurgs wrote:Where can i find a definitive figure for calculating when i would be at the 25% stage with AVCs . I can see clearly what i have saved in AVCs but the main pension pot is all a bit confusing with so many changes they've made .

You can work it out yourself using the info on page 12 of your plan guide.

Chris19 · Post by **Chris19** » 30 Jun 2019, 21:22

What year did we receive this plan guide? I don't have a page 12 in my annual statement

Post by **RobertT** » 01 Jul 2019, 04:03

Chris19 wrote:What year did we receive this plan guide? I don't have a page 12 in my annual statement

You should have got it towards the back end of last year if memory serves me correctly, separately from your annual statement.

It's also available to view on the RMPP website: https://www.royalmailpensionplan.co.uk/ ... ts/library" onclick="window.open(this.href);return false;

Chris19 · Post by **Chris19** » 01 Jul 2019, 14:51

Ok thanks