Transfer AVC but leave pension

Hawkey99 · Post by **Hawkey99** » 13 Nov 2020, 06:57

I know you can transfer your AVC to another provider but I wondered if you could do this and leave your NRA65 pension not taken....

Thanks

Post by **RobertT** » 13 Nov 2020, 14:45

The guide to AVC's says yes, but I would suggest asking the PSC to make sure.

From your previous posts, I'm assuming you're asking because of the tax implications?

Personally, after I've taken my NRA60 plus tax free lump sum, I expect to have an excess amount left in my Flexiplan.
I've looked at how much tax I'd pay by taking it with my NRA65 compared with transferring it, and in my case taking it with my NRA65 will be the most tax efficient.

But obviously it will come down to individual circumstances.

Jefferson Starfish · Post by **Jefferson Starfish** » 14 Nov 2020, 14:35

By 'come down to individual circumstances' I assume you mean the amount of income you have in relation to the personal tax allowance?

Post by **RobertT** » 14 Nov 2020, 15:45

There may be other reasons, but yes, that's what I was thinking about!

In my case I expect my income to be at least equal to the personal tax allowance, so if I choose to transfer my AVC's to another pension arrangement, when I come to access that money the first 25% will be tax free and the remaining 75% will be taxable.

But if I take those AVC funds with my NRA65 they will help to increase the value of my 'NRA65 pot'(compared to transferring) and in turn I'll pay tax on a smaller amount.

Also, I think any excess once I've taken my NRA65 is paid out as a UFPLS, meaning the first 25% of that excess will be tax free too.