AVC transfer value on 60 benefits quotation

[Rapido123]

hi, just had a valuation come through for my 60 benefits from the RMSPS and the transfer value quoted on there for my AVC is over £5000 less than the current value is there any reason for this. I am 56 so if I took my benefits, it will be four years early, but I wouldn’t have thought the AVC would be reduced. Not sure what the reason for this is any ideas, thank you

[Snurgs]

Hi I'm in a similar position. Taking all benefits at age 57 due to health reasons .Probably not the best financial move but suits me as I'll be mortgage free .With regard to your AVC they give a reduced forecast of the sum you'll receive incase the value falls before they cash it in .

[Jefferson Starfish]

Could it be you've maxed out the tax free lump sum and the £5k would be left over?

[Rapido123]

There are several different quotations for taking lump sums with and without using my Avc but the reduced valuation is if I was to transfer Avc out of Royal Mail to a personal pension. They seem to include a an Avc quotation with your benefits now which I don’t believe they used to. Just seems odd that the value is reduced could be as mentioned above that seems quite a lot to reduce it to cover themselves if the valuation fluctuates. Thanks for your replies.

[RobertT]

Interesting they now seem to include AVC's in the quote....it's about time if correct.

There's no reason why the AVC figure should be reduced if taken early, unless maybe you're still invested in 'with profits' via one of the older(pre 2010) providers? In which case there would probably be a Market Value Reduction if taken before NRA.

Otherwise there shouldn't really be a difference between the figures if taken with your pension, or when transferred.
Logically I would have thought holding some back in case of market fluctuation, would apply to both options.

Without seeing the figures in black and white, it's hard to be 100% sure.

[Rapido123]

I had requested options for 60 and 65 benefits but only received options for 60 benefits so I have asked for them to be resent. I have spoken to the pension service centre this morning and apparently only Flexiplan will show on your 60 options as the bonus plan is linked to your 65 benefits. My Avc does show as an option on the paperwork I received.

[RobertT]

Bonusplan being linked to Age65 benefits is a new one on me.

There's never been any info saying that in the 25+ years I paid into it, and there's none on the RMPP website either.
Infact I was paying into it well before Age65 benefits were introduced(2010)!

Sounds like you've come across a rogue 'help'line worker.

[Rapido123]

Possibly I will wait until I get all my quotations through.AVCs shouldn’t be reduced in any way whether you leave them with Royal Mail or transfer them out should they. I saw on a previous chat that DBCBS is reduced by 1.4% for every year you take it early is that correct, thank you

[RobertT]

AVCs shouldn’t be reduced in any way whether you leave them with Royal Mail or transfer them out should they.

No(except for the possible scenario mentioned in my previous post), but their value can always fluctuate with the investments you choose via Scottish Widows.

I saw on a previous chat that DBCBS is reduced by 1.4% for every year you take it early is that correct, thank you

I did some messing about on the RMPP calculator when it first went live and if I remember correctly, a reduction of around 1.4% per year is about right based on what it's worth 'today'.

But if you base it on how much it might be worth at 65, the reduction will be more.

[linntroika]

I did not take my AVCs with my NRA60 but the quote was 10% less than the actual value of the AVC. I questioned this and was informed this was normal .
Cant honestly remember if they said it would be rectified or the additional 10% would be aligned to the NRA65

[Rapido123]

Thank you

[Steve_claret]

I did not take my AVCs with my NRA60 but the quote was 10% less than the actual value of the AVC. I questioned this and was informed this was normal .
Cant honestly remember if they said it would be rectified or the additional 10% would be aligned to the NRA65

In quotes they don't tell you the actual amount just in case your investments take a nose dive before payment. You will get the actual amount they are worth on the day you do take them.

[Winseer]

I'd quite like to retire this year. What do I have to do to get an offer of a pension I can actually live on from the plan I paid into for so many years?
I'm only receiving questionable paperwork through the post thus far, which seems to be asking ME questions when they should be telling me how much I've got to come, and how to go about claiming it.....