Hello,

Does anyone and I mean anyone understand AVC's for pensions. Are they worth it or better in another plan? if so what?

Karen

Hi Karen

Our boss sent all of us over 40 on a getting ready for retirement course :o Those of us just over 40 were mortified and insulted but it was actually a great day and really useful! There was a speaker there who spoke all about pensions options including AVC's, but what he basically said was it very much depended on your personal circumstances and the type of pension you had what was the best way to top it up.  His advice was that the best thing to do was consult an independent financial advisor, who would work out the best way to increase your pension.

That's probably not much help really :)

Lesley

It all depends on what type of schemes they are etc.
I know with one of ours you can buy extra years service with a lump sum AVC.
The important thing to realise which some don't if you have got a capability to
have an AVC, then you can contribute upto 15% of your annual salary into pensions
and AVC's and get the tax benefit. So for example one of our scheme's normal monthly pension contribution
is 6.35% of salary. So you have a potential for upto 8.65% AVC contribution if you want to.
To be honest you are better off speaking to an independant financial advisor with all the options/benefits & paperwork.
As I'm no pensions geru just a payroll person

All I know is that anything you can do,to avoid tax (legally :D ) and add to a pension at the same time,should be a good option :) both Hubby and I contribute avc's and have done so for many years.

When we had a 'financial review' last year the advisor said we were very wise to have done this!

We don't take full advantage of it though and only contribute a small percentage of what we could,but do intend to try to increase that amount year by year up to retirement.

We also both applied and received a government forecast of our state pensions,not that it makes much sense,as it's a fair way off ,but at least it shouldn't be such a shock if you have some idea of what you 'might' receive at retirement age.

How many others look back now and say" I wish I had been able to afford to save ?? pounds a week all those years ago,look what I could be doing now with all that cash!! :( "

Getting independent financial advice is a good idea every now and then,to make sure you are making the most of what you have IMO.

Jacqueline

To be honest you are better off seeing a Independent Financial Advisor as everyones circumstances are different.  You could contribute to an AVC, this would generally mean putting more money with the same provider as your company scheme which is a bit like "putting all your eggs in the same basket" depending on your circumstances and how much you earn you could always start up a personal pension scheme which will be totally removed from your company scheme and you can continue paying into it even if you leave your current employer.  An advantage of an AVC is you shouldnt get charged any set up costs or admin costs as your company should pay them.  You could always totally move away from pensions and put your money into an ISA, then when you come to retirement you could buy an annuity the same as you would with a pension.  All of the above has tax advantages.  But as I said you are better of seeking financial advice, although I am a qualified IFA I do not practice and therefore will not be totally up to date with all products.  If you want any more info just ask and I will drag out my study books to give you some proper "text book" answers :D :D

It does depend on the pension you have but is always a good idea to top up your pension. If it is a company pension scheme then they should have a Pensions Team that should spend some time with you and explain how it all works and what you will gain from it if you are retired on age or medical gorunds. There has been a lot of press lately on final salary schemes so it maybe advisable to ask the question if the company pension scheme is a final salary scheme, what is the current state of the fund and the projections for the future to ensure the trustees are minimising the possibilty of the scheme going pear shaped :) Have a look here for some more info http://news.bbc.co.uk/1/hi/business/2094320.stm

If it is a Private Pension scheme then I would advise you not to speak to the company you are with as they will bend over backwards to get you to pay more money in as they will get commission for it !! Alway go and seek Independant Financial advise as they will be able to determine what is best for you.They will be able to look at the whole of your financial health and decide a long term plan for you :)

HTH

Lucy

Just seen this !!

http://news.bbc.co.uk/1/hi/business/3479711.stm

I have a private pension but joined the company final salary scheme in 2000. I kept my private pension wher it was and kept the contributions going. Others transfered private pensions to the company scheme and paid avc into the company scheme. The company scheme folded in 2002 I am glad I did not transfer my personal pension to the company scheme. We are silll waiting to hear the value of our funds. I was listening on the radio this morning and they were saying in these cases where company schemes have closed the money is being used for the people already retired. Take advice from an independent adviser of your choice to get the best advice for you That is what I did

Jean

Hello,

Well Thank you all. I am now looking for a Personal Financial Advisors. One who deals with pensions.
Karen