Single Scheme Purchase Benefits

[Sunnygirl69]

Is it possible to use the funds I have accumulated in AVC's to purchase extra retirement benefits at a later stage?
Also what are the benefits of doing this over using AVC's in usual way?
I'm HSE employee since 2015.
Thank you

 

[LDFerguson]

@Ent319 wrote a really useful post on the Single Scheme - click here.

Two of the conclusions from that post...

• Purchasing benefits through the Single Scheme purchase facility should probably only be considered towards the end of your career, and definitely not earlier than nine years after you’ve been a scheme member. It might not make sense at all, depending on the rate you have to pay. It probably makes more sense for you to invest your money in an AVC, earn interest on the amount you invest (with tax relief) and then consider whether you want to purchase by way of transfer later on in your career.
• The career average nature of the Single Scheme probably means that you want to start making AVCs very early. Over the course of your career you'll likely receive promotions that drastically increase your maximum pension benefits, but your actual pension benefits will be much lower than the revenue max. If you're an optimist, by investing in AVCs you could essentially "pre-fund" for raises in maximum revenue pension benefits by future promotions. The gap created by the state pension in your benefits likely makes this possible.

If you're considering the above strategy, make sure that any AVC product you contribute has no penalties for transferring out of it before retirement age, e.g. to use the fund to purchase. Any AVC PRSA product cannot by law impose such penalties.

Regards,

Liam
www.FergA.com

 

[Sunnygirl69]

Thank u Liam