Transferring AVC’s to SIPP- pros and cons

[July 1981]

I have a small AVC 5K that I didn’t take when I took my NRA 65 aged 61, I will have a separate AVC circa 25k when my NRA 67 is due, I don’t intend to use the money until aged 70, is it possible to drawdown from your matured AVC’s?What would the pros and cons be of transferring to a SIPP, does this affect the 25% tax free, thanks in advance.

[RobertT]

It's not possible to drawdown directly from RM AVC's.

If you're not taking all your Flexiplan/Bonusplan with your Age60/65 benefits, you have to transfer out to a personal pension and access from there.

By the sounds of it you've already taken all your Age60/65 benefits, so it's a case of when rather than if you transfer the £5k, as it's totally separate from the RMCPP and can't be taken with that.

RMCPP AVC's have to be taken at the same time as your main benefits if that's at 67, or later if you stay employed by RM beyond that age.
But if you leave the company before 67, you can transfer out all 3 elements(pension, lump sum{inc booster} & AVC's) if you choose.

Whether transferring out is a good thing will come down to the individual.
It maybe more tax efficient for some but not for others, as it depends on other income and how you actually access it.
But you will have a much larger choice of investments with a personal pension.

Personally, I transferred my Bonusplan into my SIPP to help fund my early retirement. While the Flexiplan will fund the tax free cash with Age60 benefits, with the excess from that also being transferred out afterwards and drawn down.
That's the most tax efficient for me!

[July 1981]

It's not possible to drawdown directly from RM AVC's.

If you're not taking all your Flexiplan/Bonusplan with your Age60/65 benefits, you have to transfer out to a personal pension and access from there.

By the sounds of it you've already taken all your Age60/65 benefits, so it's a case of when rather than if you transfer the £5k, as it's totally separate from the RMCPP and can't be taken with that.

RMCPP AVC's have to be taken at the same time as your main benefits if that's at 67, or later if you stay employed by RM beyond that age.
But if you leave the company before 67, you can transfer out all 3 elements(pension, lump sum{inc booster} & AVC's) if you choose.

Whether transferring out is a good thing will come down to the individual.
It maybe more tax efficient for some but not for others, as it depends on other income and how you actually access it.
But you will have a much larger choice of investments with a personal pension.

Personally, I transferred my Bonusplan into my SIPP to help fund my early retirement. While the Flexiplan will fund the tax free cash with Age60 benefits, with the excess from that also being transferred out afterwards and drawn down.
That's the most tax efficient for me!

Hi Robert, many thanks, I’m thinking off working part time from 65 and might carry on if I’m fit and well, if that’s the case I’ll need to transfer into a SIPP to avoid 40% tax on any UFPLS, I’m assuming I can do this at age 67 when I take my pension?

[RobertT]

According to the RMCPP website, if you're at the point of taking your benefits you have to take them all at that time.
But if you leave the company(or just leave the scheme), you can transfer out between then and when you take your benefits.