Work are switching schemes (from a defined benefit to defined contribution 🙁 ) and the previous inhouse AVCs will stop (they will still pay out on maturity as a discrete investment)

question is do I start new AVCs (administered by Legal and General, no fees cos in-house) – or do I go for SIPP or something else?

not asset rich so would only be dripfeeding contributions, and not contemplating BTL or high risk investing. thanks in advance for for reading and contributing to such a boring post 🙂

Some employers (mine for example) will make some matching contribution if you go for AVCs (as they’re saving the employer NI contribution payments and pass some/all of this saving on). So you can get the benefit of pre-tax contributions and employer contribution too. No brainer in my case.

Check the details !

Based on your risk preferences and drip contributions go with the company scheme. It’s just easier with regard to tax, basically you pay in (they may do some matching of your contributions as well as regular monthly payments) and all the tax is sorted out monthly vs stand alone avc where you may have to claim tax back at the end of the year.

One other note the new scheme should be separate, do not mess about with the defined benefit one and definitely not unless you have advice you can trust. They are like gold dust and it’s highly unlikely you can do better than the pension they will pay you so leave it alone, I’ve heard stories of “advisers” and companies trying to get employees to encase or transfer them when it’s almost certain they are best left alone.

good points – yes the DB stuff will be left well alone and I’m keeping the statements in a safe place !

the company are contributing 10% and I’m contributing 8% to the main scheme so pretty sure that the AVC is a self funded add-on, but I will be rereading the small print again tonight

my instinct says to fund the AVC but just wanted to be sure I wasn’t missing a trick – the AVC has differing investment fund choices so I can flex the investment exposure…

No fees = no brainer

the company are contributing 10% and I’m contributing 8%

that is a very good contribution, what is the maximum they’ll put in and you match?

that is the maximum on both sides, one of the first jobs I did was to fill in the form to increase my contribution – I’m kinda weird compared to most of my peer group in that during my early twenties I set up full contributions to a staff pension and did avcs as well (touching 40 now) so hopefully my retirement won’t consist of decades of penury