Should I continue paying my AVC

S

S126

Guest
I am a public servant and am in the Volunary Hospitals Superannuation Scheme. I joined in 1989 and at 65 I would only be a year short of the 40 years, but I have bought that year back so now should have full service when I retire.
I am now 45 and I have been contributing to an AVC scheme for the past approx 10 years but am concerned that this may not be of any benefit when I retire. I was told at the time I joined the AVC scheme that it would enable me to retire at 60 or get a better lump sum if I retired at 65. I am now if this is the case.
Up to a few years ago, I received yearly statement from the scheme, but the value of the AVC did not appear to be of any great value compared with the amount that I had contributed.
I would be grateful if you could let me know whether or not I am wasting my money contributing to the scheme, what course of action I should take and where to go for further information.
The AVC was originally taken out with the Irish Pensions Trust but has been taken over and it is now with cornmarket.

Many thanks for reading this, and I look forward to hearing from you
Kind Regards
Sean
 
All pension returns are down at the moment - but unless the current economic woes are unique in history, the markets ill pick up over time. You have to decide firstly;

1) If you want to take advantage of the current tax breaks available for AVC purchases (understanding that your money is tied up to retirement)
2) Is this Cornmarket AVC the best AVC option for you?

Have you any information as to the charges you are paying on this AVC?
 
seethelight said:
Heres a idea maybe you should actually ring your provider and try asking their advice then take a second opinion from another advisor. Its your money grow up take responsibility
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Well then you have missed the point of this Forum - to get advice from Individuals who may work / have expertise in a certain area!
 
MANTO said:
Well then you have missed the point of this Forum - to get advice from Individuals who may work / have expertise in a certain area!
Click to expand...

+1

Also seethelight I wouldn't necessarily agree with ringing your provider only for information, they will of course want to keep your business.
 
seethelight said:
Heres a idea maybe you should actually ring your provider and try asking their advice then take a second opinion from another advisor. Its your money grow up take responsibility
Click to expand...

Besides, the provider will not give advice - they will give information.
 
First of all I would say that the money already spent is not wasted; you must have got tax relief on your contributions (possibly at around 40%) so disregarding the effects of inflation, your pension fund would need to have decreased by that amount to incur any loss at all. You probably will not be able to withdraw it all as a tax-free lump sum on retirement (since you will have the full 40 yrs) but the money will remain in a fund to provide income and you can make tax free withdrawals from the fund at certain later intervals.
It is unlikely that further payments are necessary or tax-efficient; but that all depends on the amount of your contributions. You could consider stopping now, and making a 'last minute' avc contribution just before retirement if your tax circumstances warrant it.
 
Stopped my AVC's totally on Monday.

When (if) things get better I'll review it again.

No point saving for tomorrow if you can't afford today.
 
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