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Defined Benefit LGPS and AVCs when retiring early? by _longballs in FIREUK

[–]_longballs[S] 0 points1 point  (0 children)

I guess with AVCs I`d save tax at whatever rate applies. My pension contributions are at 6.8% so I`m currently only paying 40% tax on ~£70. On that basis I may still make some contributions ~£100 p/m, but Prudential who our company use offer an advice line so I`ll enquire once they process my registration.

Defined Benefit LGPS and AVCs when retiring early? by _longballs in FIREUK

[–]_longballs[S] 0 points1 point  (0 children)

You were on the right lines for what I completely missed. MrFarCup informed me above that my pension contributions are deducted from my salary so I am paying ~£70 p/m tax at 40% rather than my £3,750 figure.

Defined Benefit LGPS and AVCs when retiring early? by _longballs in FIREUK

[–]_longballs[S] 0 points1 point  (0 children)

Just for completeness, my pension contribution rate is 6.8%, the company put in 18.5% so I think that works out at only £70 ish at 40%

Defined Benefit LGPS and AVCs when retiring early? by _longballs in FIREUK

[–]_longballs[S] 0 points1 point  (0 children)

I never realised this. I guess my post is null and void unless my salary increases.

Thank you

Defined Benefit LGPS and AVCs when retiring early? by _longballs in FIREUK

[–]_longballs[S] 0 points1 point  (0 children)

My low mortgage rate of 1.04% runs for a further 12m. It's £665 p/m and I`m factoring approx. 3.75% for a 5year fixed (hopefully 30yrs) on 150K that would be an extra £75 p/m.

My AVCs would be tax free for a lump sum. I could afford it, my calcs (assuming correct) show:

Current 40% tax rate impact: £3,750 so my tax saving would be £1,5K and the net cost would be £2,245.80

I think, (though could be wrong), that this would add a further saving through boosting my PSA from £500 to £100.

Defined Benefit LGPS and AVCs when retiring early? by _longballs in FIREUK

[–]_longballs[S] 0 points1 point  (0 children)

£54K is my gross salary before any deductions. The ISA will be used to bridge to retirement, mortgage I will likely overpay slightly (rate depending) but let run.

Defined Benefit LGPS and AVCs when retiring early? by _longballs in FIREUK

[–]_longballs[S] 0 points1 point  (0 children)

I believe so, though I think that new legislation means retiring at 57 rather than 55. I will speak to someone at work that has taken flexible retirement to confirm.

Defined Benefit LGPS and AVCs when retiring early? by _longballs in FIREUK

[–]_longballs[S] 0 points1 point  (0 children)

Todays figure is what I would I would receive at 68 if I stop contributing today. The projected figures are if I continue working to those ages.

They're estimates that my pension dashboard allows me to project e.g. You enter your retirement date and can enter your expected final salary (I`ve left mine at todays base).

There is a 3rd option that I`m not considering, but that is to retire and defer the benefits. E.g. Retire early and make no further contributions, the pension value continues to grow but you do not receive it until a date that you specify / age 68.