AVC's

NWpostie · Post by **NWpostie** » 24 Jul 2020, 17:14

Will the SIPP scheme be run and administered by RM

Post by **RobertT** » 24 Jul 2020, 18:33

NWpostie wrote:Will the SIPP scheme be run and administered by RM

I think you've got the wrong end of the stick there!

A Self Invested Personal Pension(SIPP) is basically the same as any other personal / Defined Contribution pension, but it will usually have more investment choices.

Some companies do offer SIPP's to their employees but they are often set up by the individual too. Either way, they will usually be administered by fund supermarket type firms such as Hargreaves Lansdown or AJ Bell, aswell as recognised pension providers like Standard Life & Legal and General.
I'm sure Google will tell you more!

RM are planning on enrolling all employees into the proposed CDC scheme in due course, so there is obviously no need to provide a SIPP!

NWpostie · Post by **NWpostie** » 24 Jul 2020, 20:54

RobertT wrote:
NWpostie wrote:Will the SIPP scheme be run and administered by RM
I think you've got the wrong end of the stick there!

A Self Invested Personal Pension(SIPP) is basically the same as any other personal / Defined Contribution pension, but it will usually have more investment choices.

Some companies do offer SIPP's to their employees but they are often set up by the individual too. Either way, they will usually be administered by fund supermarket type firms such as Hargreaves Lansdown or AJ Bell, aswell as recognised pension providers like Standard Life & Legal and General.
I'm sure Google will tell you more!

RM are planning on enrolling all employees into the proposed CDC scheme in due course, so there is obviously no need to provide a SIPP!

Lots to learn about with upcoming new scheme and ways of doing things, I remember you saying that once we have enrolled on CDC, there is a possibility that our AVC will cease, I presume our AVC contributions will stop automatically.

heapsy · Post by **heapsy** » 24 Jul 2020, 21:10

RobertT wrote:
heapsy wrote:Thanks for the quick reply. I already pay into a SIPP and have just increased my payment for next month. I'm not sure if the SIPP will grow to a huge amount, I only started last year.
If memory serves me correctly you're 53 or will be this year, and you want to retire at 60?

I don't know when CDC will be introduced, but sometime in 2021 seems likely.
So if payments into the current AVC's stop next year and you manage to save the same £100 per week gross you're currently saving, but into your SIPP, you'll have over £31,000 plus investment returns at 60. That's not including current balance & contributions.

That fits in quite nicely with my example, although that's obviously all it is and won't necessarily apply to you.

From a tax perspective a SIPP isn't as good as RM AVC's because you don't get the benefit of PSE, but I would see your position, from the limited amount I know, as one (AVC) door closing, but another (SIPP) door opening.

If you can make the tax side of things work for you and your own financial position, taking the tax breaks on the way in but not paying any or little tax on the way out, then pensions will be beat ISA's hands down.

Very close with the age. 53 in August.

The SIPP will probably be between 60 and 80K, but possibly more and yes, 60 is my ideal retirement age. This will probably mean paying a hefty amount in tax but probably nothing I can do about it. Thanks.

Post by **RobertT** » 25 Jul 2020, 03:57

NWpostie wrote:Lots to learn about with upcoming new scheme and ways of doing things, I remember you saying that once we have enrolled on CDC, there is a possibility that our AVC will cease, I presume our AVC contributions will stop automatically.

You currently have to be an active employee member of the RMPP to pay AVC's via Bonusplan and Flexiplan.
As CDC will be a completely new and separate scheme to the RMPP, then I'm assuming we won't be able to continue paying AVC's when that starts. Although I could be wrong?

If that does happen, I think it's reasonable to assume that AVC's will stop automatically, the same week as we pay our last contributions into the DBCBS.

Post by **RobertT** » 25 Jul 2020, 03:58

heapsy wrote:Very close with the age. 53 in August. The SIPP will probably be between 60 and 80K, but possibly more and yes, 60 is my ideal retirement age. This will probably mean paying a hefty amount in tax but probably nothing I can do about it. Thanks.

Retiring before 60 would prevent yourself from paying a substantial amount of tax. That's what I'm using my personal pension for, aswell as for supplementing my NRA60 & NRA65 up to state pension age.

But everyone will be different.

NWpostie · Post by **NWpostie** » 25 Jul 2020, 13:19

RobertT wrote:
NWpostie wrote:Lots to learn about with upcoming new scheme and ways of doing things, I remember you saying that once we have enrolled on CDC, there is a possibility that our AVC will cease, I presume our AVC contributions will stop automatically.
You currently have to be an active employee member of the RMPP to pay AVC's via Bonusplan and Flexiplan.
As CDC will be a completely new and separate scheme to the RMPP, then I'm assuming we won't be able to continue paying AVC's when that starts. Although I could be wrong?

If that does happen, I think it's reasonable to assume that AVC's will stop automatically, the same week as we pay our last contributions into the DBCBS.

Aye that's why I've been bunging in £100 a week into my Flexiplan, to try and get ahead of the game.

My concern is the CDC expected NRA of 67 years of age.