Setting up an AVC

[dino]

Hi,
I have a good DB pension but as I was a late starter I am probably only going to have 32-34 years service when I hope to retire in my late 50's. I am 42 now.
I am thinking of setting up an AVC to top up my DB pension. I have a few questions..
1. I have a rental property with no mortgage and I get heavily taxed on it. I have heard that I can put the rental income straight into a pension and get tax relief. Is this true?
2. I have a small annuity that I receive each month. It is the surplus of a Death in Service benefit payment after my wife's death. I pay top rate tax on this. Can this be put into a pension to get tax relief?
3. I also receive a widows pension every week. This is also taxed at the top rate. Can this be used in a similar manner as above to reduce my tax?

Thanks,

Dino

 

[Steven Barrett]

Hi Dino

None of those incomes you are in receipt of are pensionable, only your earned income is pensionable.

If you are in a DB pension, be aware that it is unlikely that the trustees will let you draw down your pension from the DB scheme before the normal retirement age. As any AVC payments are linked to that DB pension scheme, you won't be able to access the AVC payments early either.

If you want to retire in your 50's and can't access your pension fund, you need to fund for any shortfall in income through private savings as pension funding as a member of a DB scheme won't be suitable.

Steven
www.bluewaterfp.ie