can you cash in an AVC that has ceased being paid into, before retirement age.
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the avc was paid into for about 10 years untill a divorce. I have a cash value but can you actually release the funds?
d_gri003
1 year ago
Expert Financial Adviser Answer
Rob Simpson
answered 1 year ago
Thanks for the question. As with most pension related queries the simple answer is "maybe".
Firstly, you do have to be age 55 or older to access any pension benefits.
Also, the AVC was originally linked to an employer's pension scheme. You will need to check with the Trustees of this emplyer's scheme to see if their scheme rules were amended to allow AVC benefits to be taken at different times to the main scheme.
If you can tick both of these boxes then, yes, benefits can be taken now. The benefits can be taken in many different ways so contact me if you need to discuss this further.
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Firstly, you do have to be age 55 or older to access any pension benefits.
Also, the AVC was originally linked to an employer's pension scheme. You will need to check with the Trustees of this emplyer's scheme to see if their scheme rules were amended to allow AVC benefits to be taken at different times to the main scheme.
If you can tick both of these boxes then, yes, benefits can be taken now. The benefits can be taken in many different ways so contact me if you need to discuss this further.
Expert Financial Adviser Answer
In addition to what Rob has said....
It's also worth mentioning that sometimes a pension is best left alone until retirement is reached otherwise you can suffer a greater potential loss by crystallising benefits prematurely and in any event you won't be able to access the entire pot.
i would strongly recommend that you take independent financial advice on all of your options as there might be an alternative solution to your predicament which might be less financially costly in the long run.
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Darren Smith
answered 1 year agoIn addition to what Rob has said....
It's also worth mentioning that sometimes a pension is best left alone until retirement is reached otherwise you can suffer a greater potential loss by crystallising benefits prematurely and in any event you won't be able to access the entire pot.
i would strongly recommend that you take independent financial advice on all of your options as there might be an alternative solution to your predicament which might be less financially costly in the long run.
Expert Financial Adviser Answer
Dr David Carter FPFS
answered 3 months ago
In addition to what Darren has said....
You can only take part of the fund as tax-free cash, with the remainder being used to provide an income. If you have not yet made a decision on this, then make sure that you will not be losing value; in some cases you may be able to purchase 'added years' in the main scheme, and added years are usually excellent value.
If you really do want or need to go ahead, then bear in mind that you may be able to improve on the provider's scheme by looking elsewhere, using what is known as the 'open market option'. When you use this option you transfer the fund from the avc to another provider (in the form of a personal pension plan - no difference, as far as you are concerned). A quick phone call to a financial adviser should reveal whether there are better options out there for you.
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You can only take part of the fund as tax-free cash, with the remainder being used to provide an income. If you have not yet made a decision on this, then make sure that you will not be losing value; in some cases you may be able to purchase 'added years' in the main scheme, and added years are usually excellent value.
If you really do want or need to go ahead, then bear in mind that you may be able to improve on the provider's scheme by looking elsewhere, using what is known as the 'open market option'. When you use this option you transfer the fund from the avc to another provider (in the form of a personal pension plan - no difference, as far as you are concerned). A quick phone call to a financial adviser should reveal whether there are better options out there for you.