Extra Rm pension by using my AVC?

[NorthernBoy]

Hi,

I left RM in 2014 and was a memeber of plan c with 21 years service and contributed to the Zurich AVC funds. I plan to take a reduced pension at age 55 in 2025 and was wondering if I can use my AVC fund to buy extra RM pension to make up for the reduction.

I am aware that the AVC fund can be used to buy a pension on the open market but annuity rates are crazy low so would get me very little. What I want to know is can I use my AVC and buy extra pension through Royal Mail and if so what is the conversion rate. My AVC pot at 55 should be around 40k.

Has anyone in plan c used there Zurich AVC fund to buy extra Rm pension or is this not allowed?

Many thanks.

[RobertT]

The simple answer to your question is there is no facility to use your AVC money to buy extra RM pension. The only way to increase your RMPP would be to take it at normal retirement age, rather than taking it earlier.

However you do have a number of different options with your AVC pot. The usual use is to fund some or all of your tax free lump sum from the RMPP. However since April 2015 it’s also been possible to transfer it out of RM/Zurich and use it under ‘pension flexibility’ rules. In which case you could buy an annuity, take it all as cash(with the first 25% being tax free), or draw it down over a period of time.

This link gives you info on what pension flexibility means for members of the RMPP: http://www.royalmailchat.co.uk/communit ... 27&t=69013" onclick="window.open(this.href);return false;

While this gives general info on what you can do with your AVC pot should you want to transfer out: https://www.moneyadviceservice.org.uk/e ... on-schemes" onclick="window.open(this.href);return false;

[NorthernBoy]

Thanks Robert, I had feeling that you could not convert avcs to RM pension but wanted to double check. My plan will be to take the AVC as cash and drawdown / invest as required.