I started in the Civil Service in 2007 at 35 years old. I take some term time so I won't have the full 30 years done when I am 65 years old. I would like to retire completely at 63 but I know the cost neutral retirement would reduce pension further.
Currently, I am just a few thousand into the 40% tax rate if I work fulltime. Taking time off in the summer with young teens or reducing weekly hours to 90% would mean I would just get 20% relief on pension contributions.
I arranged to buy back years recently. I had a thread in money makeover about it. I can't link this. I hope to stop contributing when I have 2 or 3 bought as it is expensive, particularly on the lower tax rate.
Long term I would hope to contribute something to avcs to bridge the gap between 150% of my lump sum and actual lump sum on retirement. It would mean I am getting 20% relief on contributions but taking out the money tax free. I know the avc companies make you put 25% of the contributions into an annual income on retirement. I would pay 20% tax on this. I also know the avcs may not let you take 75% of your funds in a lump sum if your pension is under 12k. My pension would be around 12k maybe less, and I would have to wait til 68 to claim the contrubutory old age pension as my pension is integrated with social welfare.
My question is: is it worth it doing avcs, complete with all the charges when I only get 20% tax relief. Would I be as well off forgetting about tax relief and saving in a money market product where I could take some out and retire at 63?
Currently, I am just a few thousand into the 40% tax rate if I work fulltime. Taking time off in the summer with young teens or reducing weekly hours to 90% would mean I would just get 20% relief on pension contributions.
I arranged to buy back years recently. I had a thread in money makeover about it. I can't link this. I hope to stop contributing when I have 2 or 3 bought as it is expensive, particularly on the lower tax rate.
Long term I would hope to contribute something to avcs to bridge the gap between 150% of my lump sum and actual lump sum on retirement. It would mean I am getting 20% relief on contributions but taking out the money tax free. I know the avc companies make you put 25% of the contributions into an annual income on retirement. I would pay 20% tax on this. I also know the avcs may not let you take 75% of your funds in a lump sum if your pension is under 12k. My pension would be around 12k maybe less, and I would have to wait til 68 to claim the contrubutory old age pension as my pension is integrated with social welfare.
My question is: is it worth it doing avcs, complete with all the charges when I only get 20% tax relief. Would I be as well off forgetting about tax relief and saving in a money market product where I could take some out and retire at 63?