AVC should I keep paying into it?

Post by **milly** » 24 Sep 2017, 18:03

I started paying into my AVC in 2007 and I have built up a tidy sum,I am now wondering if I am better served by just paying down my mortgage and putting my money into a stocks and shares ISA so I can get some tax free dividend Income.
I am sick of playing this pension game as they keep changing the rules of the game when I seem to be getting somewhere with my investments.

jetblack · Post by **jetblack** » 24 Sep 2017, 18:13

Choice much (much) wider with an ISA re. investments - but you would be losing the benefits (tax and PSE) of investing in a pension. Yes, the returns are tax free in an ISA - but you are still paying for it with money thats been taxed. How about a Self Invested Personal Pension ? Best of both worlds.
Definitely good to see off your debt (in most circumstances) - though with interest rates so low it might not be such a priority as it was when they were 12%.

Depends on your personal circumstances ultimately Milly, and your priorities and family commitments etc.

Post by **cloherty1976** » 24 Sep 2017, 18:15

milly wrote:I started paying into my AVC in 2007 and I have built up a tidy sum,I am now wondering if I am better served by just paying down my mortgage and putting my money into a stocks and shares ISA so I can get some tax free dividend Income.
I am sick of playing this pension game as they keep changing the rules of the game when I seem to be getting somewhere with my investments.

Same here

Post by **milly** » 24 Sep 2017, 18:21

jetblack wrote:Choice much (much) wider with an ISA re. investments - but you would be losing the benefits (tax and PSE) of investing in a pension. Yes, the returns are tax free in an ISA - but you are still paying for it with money thats been taxed. How about a Self Invested Personal Pension ? Best of both worlds.
Definitely good to see off your debt (in most circumstances) - though with interest rates so low it might not be such a priority as it was when they were 12%.

Depends on your personal circumstances ultimately Milly, and your priorities and family commitments etc.

My Royal Mail Pension would probably pay out just below the income tax threshold so I am reluctant to pay more into my AVC and end up paying income tax.

Post by **RobertT** » 24 Sep 2017, 18:46

milly wrote:I started paying into my AVC in 2007 and I have built up a tidy sum,I am now wondering if I am better served by just paying down my mortgage and putting my money into a stocks and shares ISA so I can get some tax free dividend Income.
I am sick of playing this pension game as they keep changing the rules of the game when I seem to be getting somewhere with my investments.

I’m not sure anybody on here is qualified to answer that question, because it will be a very personal decision based on your own situation, your age, your aims and the amounts of money involved.

It’s always good to pay off any borrowings and it makes sense to avoid paying too much tax, while taking advantage of any tax efficient ways of saving along the way. But we can only really give generic advice, which Jetblack has already done!

heapsy · Post by **heapsy** » 15 Oct 2017, 12:53

milly wrote:I started paying into my AVC in 2007 and I have built up a tidy sum,I am now wondering if I am better served by just paying down my mortgage and putting my money into a stocks and shares ISA so I can get some tax free dividend Income.
I am sick of playing this pension game as they keep changing the rules of the game when I seem to be getting somewhere with my investments.

Pros and Cons with both. No PSE or tax relief with ISAs, profits taken tax free later. Also, greater choice of funds. Problem with ISAs is cost. A decent spread of funds will set you back quite a bit, IF you try to create a balanced fund. I'm paying over £400 a MONTH. It is expensive. I'm also putting just short of £119 a week into AVCs. I started late, so I'm trying to catch up. My thinking is, think about my future. Not sure if I could do the job until 65. Also, what exactly will the job look like in a few years time?
One thing you cannot buy in this life is time. I'm 50, and tbh I look at the job differently. Saturdays should be scrapped, or at most, parcels and specials only. I remember the decent finish times we had, now we work all day.