To avoid 40% tax I am looking to make an AVC payment this tax year. I plan to retire in around 4 years. I would like a scheme which allows the money to go to my wife should I die first. I don't much mind whether the fund generates a lump sum or an annuity (preferably lump sum which gives me the flexibility)
Any specific recommendations, or where to go for good advice?
Thanks
Chris
You'll just pay some money into a personal pension then (AVCs are dead). If you are going to work with no advice then you need to choose a provider. They all have to work to the same rules so they will all provide you with the same retirement options, as you have stated above. You need to decide which provider to use, based on how much you like them and whether they have a good range of funds that will suit you. If you do it yourself you will get no better - or even a worse -deal than if you go through an IFA. If you are concerned that an IFA will put you into the company paying the most commission, ask him for a printout of the commission he'd get from a whole range of companies. Then you can choose the one paying the least (and it will probably be a bad choice that you make!). Best is to ask him how much he'll charge as a fee and refund all the commission into the plan. Very few people opt to pay fees. They just complain about the commission process.
Rob Graham
I believe it is still the case that all personal schemes produce a lump sum, which can only be used in certain ways. You will almost certainly have to use some of it to buy an annuity. You will normally be allowed part of it back as a tax free lump sum - this is an incentive to contributing to the pension, not a primary means of saving for a lump sum. Nowadays, if the government thinks you have adequate annuities to avoid becoming a burden on the state, you may also be able to get some back as a taxable lump sum.
Buy outs of final salary schemes may have added restrictions, but even then I think you are not limited to using the original provider for the pension.
Thanks guys. I do intend to ask an IFA I know, but I prefer to do some research of my own as well..
The Pensions Advsory Service (TPAS) and the Financial Services Authority (F SA) are the experts -
"A surviving spouse or dependant has three options:
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