Author Topic: AVC Wise or post-tax SIPP?  (Read 9446 times)

mindysimmons

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AVC Wise or post-tax SIPP?
« on: September 01, 2023, 02:19:38 PM »
My sister has asked me for some advice and I'm not sure how to respond.

We've been talking about pensions and she has decided she wants to invest in one.

She works for the local council and so has access to AVC Wise - that seems to be the default pension provider. I only have knowledge of SIPPs (via salary sacrifice) and I'm not sure what to advise. My instinct would be to invest in a SIPP post tax to get more control over the fund, but I'm not sure.

Is using AVC wise a good idea? Does anyone have any experience with them? She is 43 and is a basic rate tax payer. 

Thank you.

PhilB

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Re: AVC Wise or post-tax SIPP?
« Reply #1 on: September 02, 2023, 05:03:20 AM »
A quick Google seems to suggest that rather than being the AVC provider, Wise run a salary sacrifice scheme for LGPS employers, with the funds then going to the employer's usual AVC provider.

She needs to check the details, but it looks like a no brained to go this route.  A normal SIPP would just save the tax.  It looks like the Wise route also saves her NI and possibly some of the employer NI savings. I can't see any benefit from having a better fund choice in a SIPP being enough to offset that - and she could always transfer the funds out later.
On top of all that, she might be able to leverage her DB pension to take the whole of the AVC fund tax free at retirement.
If thus had been available when Mrs B was an LGPS member we would have bitten their hands off.

mindysimmons

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Re: AVC Wise or post-tax SIPP?
« Reply #2 on: September 03, 2023, 04:27:23 AM »
Thank you so much for your helpful reply. It does seem like a good deal with the NICs + tax saving.

I think she can also change the contribution amount as often as she likes, so it's pretty flexible too.

I'll encourage her to look into it (I was pretty lost when she phoned me the other night, as I'd never heard of it).

Thanks again!

 

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