Hi, I have a tricky one here which I hope you can help me with to see if my logic is right.
I started in the service in 2007 aged 23. I hope to retire (to raise my family) in my late 40s. Spouse loves job and happy for me to go early. We should be mortgage free by then, kids in primary school so no creche. So 1 income very doable.
Let's say I have 25 years service of possible 40 at that stage. It is too early for CNER (age 55+ for me). CNER is also very punitive so I would plan to wait til 65 to draw drown my pension and lump sum til 65.
Q1. Can I retire at 48 but wait til 65 to draw down pension and lump sum, thus avoiding CNER penalties?
As I started at 23 and would have 42 years service possible at 65, I cannot buy back years now to add to my 25 years of service if i go late 40s.
Another option is to save into an AVC now for the next decade. As I'd have 25/40 years service, I could save a good bit into an AVC and get it all out as tax free lump sum
e.g. say final salary 90K. Lump sum with 40 years is 135,000. Lump sum earned with 25 years is 84,375. So I could save and take out 50,625 from an AVC at 65 tax free?
One disadvantage of the AVC is that it would be front loaded i.e pay in for first 10 years, but then zero contributions (as not working) for 15 years or so. At mercy of the markets from then, and still have to pay annual fees, etc.
Q2. I believe I cannot drawn down my AVC at 60 as I won't be drawing down by pension and lump sum til 65, as these are linked, even if I have resigned from the service?
For me the question of which company to go for an AVC with (historical returns and fees) is important as my pension will be lower (25 of 40 years service).
Q3. Is there any analysis out there? My union recommend Cornmarket. I also see Lyons Financial Services. No idea which is the better.
I started in the service in 2007 aged 23. I hope to retire (to raise my family) in my late 40s. Spouse loves job and happy for me to go early. We should be mortgage free by then, kids in primary school so no creche. So 1 income very doable.
Let's say I have 25 years service of possible 40 at that stage. It is too early for CNER (age 55+ for me). CNER is also very punitive so I would plan to wait til 65 to draw drown my pension and lump sum til 65.
Q1. Can I retire at 48 but wait til 65 to draw down pension and lump sum, thus avoiding CNER penalties?
As I started at 23 and would have 42 years service possible at 65, I cannot buy back years now to add to my 25 years of service if i go late 40s.
Another option is to save into an AVC now for the next decade. As I'd have 25/40 years service, I could save a good bit into an AVC and get it all out as tax free lump sum
e.g. say final salary 90K. Lump sum with 40 years is 135,000. Lump sum earned with 25 years is 84,375. So I could save and take out 50,625 from an AVC at 65 tax free?
One disadvantage of the AVC is that it would be front loaded i.e pay in for first 10 years, but then zero contributions (as not working) for 15 years or so. At mercy of the markets from then, and still have to pay annual fees, etc.
Q2. I believe I cannot drawn down my AVC at 60 as I won't be drawing down by pension and lump sum til 65, as these are linked, even if I have resigned from the service?
For me the question of which company to go for an AVC with (historical returns and fees) is important as my pension will be lower (25 of 40 years service).
Q3. Is there any analysis out there? My union recommend Cornmarket. I also see Lyons Financial Services. No idea which is the better.