Transferring your AVCs

You can transfer your AVC fund to another pension scheme or arrangement, including to a scheme that offers flexible benefits, independently of your main Scheme benefits; and provided you have stopped paying AVCs, you can transfer your AVC fund even if you continue to contribute to the Scheme.

Different pension providers offer different options for how you can use your AVC, including the option to buy regular income (an annuity). By transferring out you may be able to access options that are not available under the Scheme rules, such as:

  • taking a number of lump sums at different stages.  Usually the first 25% of each cash withdrawal is tax-free with tax payable on the rest.
  • taking the entire pot as cash in one go.  Usually the first 25% will be tax-free with tax payable on the rest.  Remember it is possible to take your entire LGPS(NI) AVC plan as a tax-free sum if you leave it in the Scheme and take it at the same time as your main Scheme benefits.
  • a flexible retirement income.  This is known as flexi-access drawdown.  You are normally allowed to take a tax-free lump sum of up to 25% then set aside the rest to provide taxable lump sums as and when, or a regular taxable income.

There may be tax implications associated with accessing your benefits in the ways described above. The income from a pension is taxable; the rate of tax you would pay depends on the amount of income that you receive from a pension and from other sources.

The different options will have different features, different rates of payment, different charges and different tax implications.

If you are thinking about transferring your AVC plan you should be aware that scammers operate in these markets and are after your pension.  You can read more about how to protect yourself from scammers at www.thepensionsregulator.gov.uk/individuals.

Pension guidance is available from the Government’s guidance website Pension Wise – a service from MoneyHelper if you are considering taking flexible benefits and have reached age 50.  The guidance is free and impartial and can be accessed on the internet, by phone, or face to face.  For more information see Pension Wise – a service from MoneyHelper or by calling 0800 138 3944 to book a phone or face-to-face appointment.

Please note, Pension Wise – a service from MoneyHelper does not provide guidance about taking benefits from a defined benefit scheme such as the LGPS (NI).

Independent financial advice
Help with finding an independent financial advisor is available at MoneyHelper.

MoneyHelper offers free and impartial money advice, including pensions and retirement information.

The Financial Conduct Authority (FCA) is the regulatory body for independent financial advisors. www.fca.org.uk.

The Personal Finance Society is the professional body for financial advisors. It provides access to appropriately qualified members who commit to the highest professional and ethical standards. www.findanadviser.org.

Unbiased is a website listing regulated and independent financial advisors, mortgage brokers, solicitors and accountants. It checks that everyone is registered with the Financial Conduct Authority (FCA). www.unbiased.co.uk.