Lump sum risk free options

Post by **RobertT** » 06 May 2020, 04:47

heapsy wrote:Just wondering. If RM stop the AVCs as has been suggested, would it make sense to put the AVC monies in a fixed interest fund, within a SIPP. I know there are costs and the return may not be great, but you would get tax relief and the fund would be less volatile. Any thoughts? Fidelity Cash Class W Accumulation comes to mind.

A SIPP could be a home to AVC cash after you've taken your RM pension benefits, but there are things to consider. Such as pension recycling rules and the fact that if you've taken your AVC's and/or any other DC pension monies, you can then only pay in a maximum of £4,000 per year into a DC scheme from then on.
If the aim is risk free savings, then cash or gilts/bonds funds are probably the ones to look at.

When/if RM stop the current AVC's, I see no reason why the money you have invested wouldn't stay with Scottish Widows and still be used to fund the tax free lump sum when taking your NRA60/65 benefits. Unless you actively decide to transfer out.

heapsy · Post by **heapsy** » 06 May 2020, 07:15

RobertT wrote:
heapsy wrote:Just wondering. If RM stop the AVCs as has been suggested, would it make sense to put the AVC monies in a fixed interest fund, within a SIPP. I know there are costs and the return may not be great, but you would get tax relief and the fund would be less volatile. Any thoughts? Fidelity Cash Class W Accumulation comes to mind.
A SIPP could be a home to AVC cash after you've taken your RM pension benefits, but there are things to consider. Such as pension recycling rules and the fact that if you've taken your AVC's and/or any other DC pension monies, you can then only pay in a maximum of £4,000 per year into a DC scheme from then on.
If the aim is risk free savings, then cash or gilts/bonds funds are probably the ones to look at.

When/if RM stop the current AVC's, I see no reason why the money you have invested wouldn't stay with Scottish Widows and still be used to fund the tax free lump sum when taking your NRA60/65 benefits. Unless you actively decide to transfer out.

I was actually thinking about the money I already put into the AVCs. Just diverting the money into the SIPP to top up my monthly payment, but something less volatile.