AVC or something else?

[Shallysally]

I need to boost my pension pot. I’m mid fifties, have both a deferred and active local government pension.

I can afford to pay £50 per month into either an AVC or other investment. Which is best please in terms of end value and also risk.

are you a higher rate tax payer? If so I think you’d get an instant boost of 40% into your pension with AVC vs if you do a SIPP you get an instant boost of 20% the. Can claim the other 20% at the end of the tax year so there’s a bit of a delay.

this works in reality by the AVC not having a £50 impact on your take home but (not exactly but for the sake of argument) £30 if that makes sense.

in terms of risk there’s risks both ways. Sometimes it can be good to diversify and have funds with a different provider but it depends what’s available in your work pension if you have limited choice. Or work pensions I think can also be quite conservative so there’s risk that you can miss out on growth.

also depends on fees on a private SIPP.

to be honest for £50 and ease of doing it I’d lock in the £50 AVC now and look to start a SIPP later. But this is what I have done but never actually got to the point of setting up the SIPP in 4 years.

@KarmenPQZ no I’m not a high rate tax payer.
I’ve been looking at SIPP, thanks for the suggestion. I have a deferred local government pension and an active one. The deferred one isn’t doing much growth wise so thinking about drawing that and paying it into an AVC. Then opening a SIPP to pay regular amounts into.

I need to look at if it’s worth moving the deferred pension tax wise though.

If you're in the LGPS there is also and option to do AVCs via salary sacrifice which is beneficial. You would pay less tax and NI.
With your deffered one it isn't as simple as just withdrawing it. There is no pot of money as such to withdraw and you would struggle to get anyone to advise you to transfer it out of DB into DC.
The yearly amount that you will get should be increasing each year.