AVC or LISA?

[afrikat]

I have a very good work pension (final salary scheme) which I could top up with additional voluntary contributions (AVC). I'm trying to work out if I am better off doing this or opening up a LISA?
I'm fairly sure the answer might be complicated - can anyone help me unpick the sums??

Is AVC via salary sacrifice in your workplace? If so, AVC may be more tax efficient to save into. Tax relief plus the tax and ni you save via sal-sac could be better than LISA bonus. If you are a higher rate tax payer then AVC is more tax efficient to pay into. (40% tax relief on your pension contributions)

You need to be mindful of annual allowance and LTA though (not that hard to do if generous DB/high earner). If you suspect you might exceed these then LISA may be a good option as additional tax wrapper.

LISA you can only pay into until 50 but cannot touch money until 60. AVC you can keep paying into past 50 and can be accessed earlier at age 55. Don't forget 25% is tax free with pension. Also, pensions aren't counted for IHT purposes. ISAs are so if you plan to leave money then you need to take that into account.

Finally, and this is a personal view, I'm not confident of the future of LISAs. It was an Osbourne brainwave and not sure current government overly support of them.

Thanks mint. I've been doing a lot of reading since I posted my question and think the AVC scheme is better as it is via salary sacrifice and I am a high rate tax payer. I am well within my allowance so it should be fine. Thanks

Afrikat, just make sure you’re within your lifetime allowance not the annual one. It’s been significantly reduced so as I high earner with a final salary scheme you might not have that much buffer.