Excess cash bal & AVC

[postie2007]

Hi, I am in section C and just received my pension options I am going to take maximum lumps sums using Cash Balance and my AVC,s. I will still have £7000 Cash Balance left over and £17000 AVC unsure how to proceed with left over funds.

TIA

[linntroika]

Hi

Im sure Robert will give you better advice than myself but for me i intend to take 25% Max lump sums of the NRA60 and 65 and transfer my AVCs and cash balance to a SIPP via Hargreaves Lansdown
I understand my pension will be reduced but i will pay a lot less tax , particularly when you add the state pension as well. The aim is to invest the lump sums into ISAs and fixed saving accounts (particularly now with great interest rates 5%plus)
If you have the discipline not to go through your lump sums i think this is the better option ,however if you think you might be tempted to spend , you might be better taking a bigger pension and less tax free cash

Best

[RobertT]

Hi, I am in section C and just received my pension options I am going to take maximum lumps sums using Cash Balance and my AVC,s. I will still have £7000 Cash Balance left over and £17000 AVC unsure how to proceed with left over funds.

TIA

Assuming you're taking all of your pension(NRA60 & 65), at the same time, I believe the only option with the excess amounts is to take them as a lump sum aswell.

They will be paid out as a Uncrystalised Funds Pension Lump Sum(UFPLS), which means the first 25% of that excess will also be tax free with the remainder being classed as income and taxed accordingly.

I don't think there's the option to defer taking them or transfer them, once you've taken your NRA65. You might have to contact the PSC to clarify on that.

I'll be in a fairly similar position to you, but plan to use my AVC's to fund the tax free cash at 60 and then transfer out the remainder to my personal pension between then and taking my NRA65. Which is an option!
With the Cash Balance providing the lump sum at 65.

For me that will be more tax efficient.

[RobertT]

Hi

Im sure Robert will give you better advice than myself but for me i intend to take 25% Max lump sums of the NRA60 and 65 and transfer my AVCs and cash balance to a SIPP via Hargreaves Lansdown
I understand my pension will be reduced but i will pay a lot less tax , particularly when you add the state pension as well. The aim is to invest the lump sums into ISAs and fixed saving accounts (particularly now with great interest rates 5%plus)
If you have the discipline not to go through your lump sums i think this is the better option ,however if you think you might be tempted to spend , you might be better taking a bigger pension and less tax free cash

Best

It's horses for courses to a large degree, some people prefer the bigger pension and some the bigger lump sum.
Personally I've always wanted both, hence why I started paying AVC's!

What's the plan with the AVC's and Cash Balance after you've put them in a SIPP?
Tax may well be payable on that money when you withdraw it!

[postie2007]

Thanks for the replies, I have decided to take the 25% option and pay tax on remainder. I will then invest the increased lump sums in an ISA.