A colleague of mine is looking to start paying into AVCs.
He is fulltime and does approx 10 hours a week overtime. He has approx 20 years ro retirement
He's asked me which is best to pay into Bonusplan or Flexiplan and I have no idea.
Any thoughts please.
Many thanks
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Feliplan or Bonusplan AVC ??
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FAB
- Posts: 234
- Joined: 06 May 2017, 22:57
- Gender: Male
Feliplan or Bonusplan AVC ??
Both!
But at the very least the Bonus Plan which is an absolute no brainer for the returns it can give for such a small investment.
But at the very least the Bonus Plan which is an absolute no brainer for the returns it can give for such a small investment.
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RobertT
- EX ROYAL MAIL
- Posts: 6645
- Joined: 09 Sep 2007, 14:26
- Gender: Male
Feliplan or Bonusplan AVC ??
The general rule of pensions is always pay in as much as it takes to get the maximum employer contribution. So Bonusplan is a no brainer because RM pay in too.
However the maximum yearly contribution is only going to be around £300 per year in total. Which factoring in the tax breaks, would be split roughly:
RM - £150
Employee - £100
Taxman - £50
In practice RM pay a varying amount up to £150 depending on how much you earn. In my case it's currently around £100.
So I would suggest paying into Bonusplan as a start, but unless you pay in for a long time, the amount you end up with isn't going to be a huge figure.
Therefore if you want a bigger lump sum, then pay into Flexiplan as well. It benefits from the same tax breaks, so each £1 going in only actually costs you £0.68, but you don't get any extra off RM.
More info here: https://www.royalmailpensionplan.co.uk/ ... n-benefits" onclick="window.open(this.href);return false;
Also bear in mind that the current AVC's are designed to improve your NRA60 & NRA65 benefits and may stop once the new CDC scheme starts, as that will be a completely separate scheme. So my advice would be to take advantage of them while they're still an option.
However the maximum yearly contribution is only going to be around £300 per year in total. Which factoring in the tax breaks, would be split roughly:
RM - £150
Employee - £100
Taxman - £50
In practice RM pay a varying amount up to £150 depending on how much you earn. In my case it's currently around £100.
So I would suggest paying into Bonusplan as a start, but unless you pay in for a long time, the amount you end up with isn't going to be a huge figure.
Therefore if you want a bigger lump sum, then pay into Flexiplan as well. It benefits from the same tax breaks, so each £1 going in only actually costs you £0.68, but you don't get any extra off RM.
More info here: https://www.royalmailpensionplan.co.uk/ ... n-benefits" onclick="window.open(this.href);return false;
Also bear in mind that the current AVC's are designed to improve your NRA60 & NRA65 benefits and may stop once the new CDC scheme starts, as that will be a completely separate scheme. So my advice would be to take advantage of them while they're still an option.
Links to all RM pension related websites are here
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heapsy
- Posts: 2949
- Joined: 02 Jun 2007, 23:40
- Gender: Male
- Location: Drinking with Gangsters
Feliplan or Bonusplan AVC ??
I agree with RobertT. Pay in to both. For what it's worth, I started paying AVCs in November 2015. My Bonus plan is worth just over £1,000. Combined total, just over £22,000, so worth doing.
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Decky Boy
- Posts: 440
- Joined: 22 May 2009, 10:00
- Gender: Male
Feliplan or Bonusplan AVC ??
As said above..l'd suggest paying into both. Bonus Plan is a no brainier. I simply can't understand why there are Posties out there NOT PAYING INTO this modest but attractive scheme ?
If you have surplus money left over on a weekly or monthly basis then pump as much as you can afford into a Flexi Plan Account as well ! ! ! Over time you'll benefit from growth and more importantly the compounding of gains or interest earned. Investing in AVCs at Royal Mail with the current PSE scheme makes perfect sense
If you have surplus money left over on a weekly or monthly basis then pump as much as you can afford into a Flexi Plan Account as well ! ! ! Over time you'll benefit from growth and more importantly the compounding of gains or interest earned. Investing in AVCs at Royal Mail with the current PSE scheme makes perfect sense
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heapsy
- Posts: 2949
- Joined: 02 Jun 2007, 23:40
- Gender: Male
- Location: Drinking with Gangsters
Feliplan or Bonusplan AVC ??
I'll tell you why they don't. People in my office are looking at the total at the top of their statement. They see the figure and then wonder how they are going to get all their money out as they think of it like a savings account. This is why so many have started taking their pension early, thinking they can get it all out before they drop dead. Crazy I know, but that is what I'm being told by people on the shop floor.