Avc

[Yamr1]

Only mid 40s
But put retirement age 65 on avcs form.

Could you still take them at age 60 if you wanted to.

[RobertT]

Are you in section A, B, C or F?

If it's A, B or C the usual use for AVC's is to fund the tax free lump sum when you're taking your NRA60/NRA65 benefits. But you can transfer out any time after 55(current legal minimum age) and access them separately if you want to.

If it's F, then you're building up a pot of money which you can access any time after 55 similar to a DC pension.

Taking your cash at a different age to the one you selected means two things:

1. The figures on your annual statement will be based on you paying into the scheme/s until the age you selected, so if you take them earlier or later those figures won't be accurate.
2. Your money may be invested in either higher or lower yielding investments for too long, if using the lifestyle option. See the guide to AVC's for more info.

[lordthornber]

As a Section C member I transferred my AVC at age 53 to my SIPP.

No access to it until 55 obviously but the option to transfer was (and still is?) there.

The amount was under £3k so was neither here nor there in terms of attaching it to my lump sum but I've achieved far better returns with it than RM did. Wish I'd done it years ago.

[Yamr1]

Cheers robert section c member

[RobertT]

As a Section C member I transferred my AVC at age 53 to my SIPP.

No access to it until 55 obviously but the option to transfer was (and still is?) there.

The amount was under £3k so was neither here nor there in terms of attaching it to my lump sum but I've achieved far better returns with it than RM did. Wish I'd done it years ago.

I should have made it clear that you can transfer at any time but you can't access the money until the legal minimum age(currently 55). That was badly worded on my part.

The benefit of paying into AVC's over a personal pension is:

1. The AVC's fund some or all of your tax free lump sum and so you don't have to give up any valuable index linked pension to get that lump sum.

2. You get the extra benefit of PSE as well as tax relief, which means every £1 gross going in only costs you £0.68. Without PSE each £1 would cost you £0.80, meaning your investments would have to perform that much better to keep pace.

3. Extra contributions from RM with Bonusplan, albeit very small amounts. It'll depend on the individual to some degree, but my personal payments only equate to about 40% of the total going in factoring in tax relief and PSE. Meaning an immediate 150% uplift on my money. With a PP(no money off RM or PSE) it would only be a 25% uplift!

4. As long as your AVC's & DBCBS aren't over 25% of your 'total pot value', it should all be tax free.

There are potentially higher returns from a wider choice of investments with a PP, but an issue with transferring out of AVC's in favour of a PP is how you access the money.
Only the first 25% is guaranteed to be tax free, so if you're going to draw down the remaining 75% and stay within the tax free allowance, then great. But if you end up paying tax on it, you could be worse off.

Personally I don't think it's a case of one or the other! As I have AVC's to fund the tax free lump sum when taking my NRA60 & NRA65 benefits, as well as a PP the fund early retirement with enough left over to draw down and supplement my RMPP benefits when I take them, and still stay tax free.

But as with all things pensions, it's always comes down to the individual to one degree or another.

[lordthornber]

Robert your comments are accurate but I should point out that as a deferred member, my AVC was sat there doing nothing.

You couldn't contribute to it, change it's investment platform, nothing. So the advantage of the SIPP transfer was obvious, take control and make it work harder - much harder in fact.

It was barely rising by 1%, at least I've had 3 years of 7%+ in the SIPP.


As I was keeping a substantial index linked pension from employment after RM, under £3000 for an AVC was pennies, relatively speaking.

Each to their own as always, as you allude to though.

[RobertT]

I could be wrong, but I'm sure you could have still changed funds within the Zurich platform as a deferred member?

The Balanced, Cautious, Growth and Shariah funds have actually done quite well over the last 5 years, as their factsheets show: http://webfund6.financialexpress.net/cl ... eID=443712" onclick="window.open(this.href);return false;

[lordthornber]

Hi Robert, you may well be right about being able to change fund, if I'm being honest I can't even remember if it was Zurich who administered it, I'm definitely right that it was doing absolutely buggerall though.

On another note, I've just made a very substantial, (staged) investment in a Standard Life Sharia Law (US) fund for my Wife, reasonable charges at 0.85 and a current 5 year return of 76%.

Don't forget to retire....

[RobertT]

Hi Robert, you may well be right about being able to change fund, if I'm being honest I can't even remember if it was Zurich who administered it, I'm definitely right that it was doing absolutely buggerall though.

Sounds like the cash fund?

On another note, I've just made a very substantial, (staged) investment in a Standard Life Sharia Law (US) fund for my Wife, reasonable charges at 0.85 and a current 5 year return of 76%.

The RM Zurich Shariah Law fund has seen a similar return over the last 5 years, with charges of 0.3%.

Don't forget to retire....

I'll be 51 this year and am planning on hanging up my pouch in 4 years time when I have access to my personal pension. Although if I wanted to make more compromises than I want to, I could probably go anytime beforehand.

[heapsy]

Probably posted in the wrong place, but here goes. I currently pay into Flexi plan and Bonus plan. Unfortunately I've had to reinstall my anti virus software, so I have no record of the Zurch AVC link. Could somebody please post the link again. Many thanks in advance.

[RobertT]

Probably posted in the wrong place, but here goes. I currently pay into Flexi plan and Bonus plan. Unfortunately I've had to reinstall my anti virus software, so I have no record of the Zurch AVC link. Could somebody please post the link again. Many thanks in advance.

The 'current' Zurich AVC link is: https://www.zurichcorporatepensions.co. ... zwhome.asp" onclick="window.open(this.href);return false;.

Although it said in the AVC booklet we got a few weeks ago that our funds will be moved to another platform/website during May, and there will be some downtime while the process takes place.

[NWpostie]

I'm quite concerned about the move to another platform, history have shown every time when any company or banks move to a platform, mistakes happens and money lost etc.

[heapsy]

Probably posted in the wrong place, but here goes. I currently pay into Flexi plan and Bonus plan. Unfortunately I've had to reinstall my anti virus software, so I have no record of the Zurch AVC link. Could somebody please post the link again. Many thanks in advance.

The 'current' Zurich AVC link is: https://www.zurichcorporatepensions.co. ... zwhome.asp" onclick="window.open(this.href);return false;.

Although it said in the AVC booklet we got a few weeks ago that our funds will be moved to another platform/website during May, and there will be some downtime while the process takes place.

Thanks for that. Yes I did get the letter also. I just wanted to set up the link on Safe Money with the anti virus I use. Will update the link when we get it. Thanks once again.