Cash balance question

[Thailand1]

Thanks for the above Robert,

Just want to hit you with another scenario if that's okay.

Example as follows;

Pension calculation as follows

Annual pension let's say £1875 = £37500

Lump sum £12500

AVC £20000

If the £12500 from AVC fund is moved into the annual pension(to get an improved monthly pension) where does my 25% tax free allowance stand? As there will only be £7500 left within the AVC fund.

Thanks in advance.

[RobertT]

Thanks for the above Robert,

Just want to hit you with another scenario if that's okay.

Example as follows;

Pension calculation as follows

Annual pension let's say £1875 = £37500

Lump sum £12500

AVC £20000

If the £12500 from AVC fund is moved into the annual pension(to get an improved monthly pension) where does my 25% tax free allowance stand? As there will only be £7500 left within the AVC fund.

Thanks in advance.

From what you've said, your £37,500 equates to 75% of your pot, therefore the other 25%, or £12,500, can be taken in tax free cash from your AVC?

The remaining £7,500 would usually be paid out as a UPFLS.

It's not possible to convert your AVC's or Cash Balance into more RM pension.

[Thailand1]

Sorry Robert my mistake....The £12500 moved into pension would be from my lump sum which is part of my pension (Section B)...So would this be 100% of my accrued pension fund? So only thing left would be the full AVC amount.

Where would my 25% tax free amount work.

Thanks again.

[RobertT]

As far as I know, if you converted your section B standard lump sum into more pension, that would then have a higher value and you wouldn't have used your tax free lump sum. So you can fund that with AVC's.

For example: your £1,875 might increase to say £2,400, giving a £48k pot value.

The AVC's could then be used to fund the lump sum, of which £16k would be tax free in this example. With the rest as a UFPLS.

You'll have to consult the PSC on how much pension you would get in exchange for your lump sum. Only when you know that, can you work out how much of the AVC's would be tax free.

I don't think it's a scenario they're used to, as most people tend to take the biggest lump sum possible.