Any examples Around...AVCs & Lump Sums

[Hawkey99]

Just wondered if there are any examples around of what you can and cannot get from your Pension and AVCs regarding lump sums.

Spoke to Pensions Centre who managed to confuse me greatly. The AVC bit is the confusing bit. Have been paying into AVC for years and the current value is 25k.

How much of this can I have as a lump sum ???

Thanks for any help.

[RobertT]

The RMPP unlike some works pensions, let you combine the value of your main pension and your AVC’s and take 25% of the total as a tax free lump sum. Although it will depend on which section you’re in as to exactly what you can do.

Section A/B members already get a lump sum as standard so that 25% limit may be breached with the addition of AVC’s. Therefore some of the standard lump sum may need to be commuted to provide more pension instead. But considering the pension is index linked for life, it’s not necessarily a bad thing.

Section C members don’t get a lump sum as standard but have the option of commuting some of their pension to provide one. AVC’s in this case can provide the lump sum without the need to lose any pension.