I have an LGPS pension, and a complicated question about AVCs. Pretty please - can anyone help?

[ouipamplemousse]

As per the title, I have an LGPS pension. I currently pay contributions of 6.8%. I just last week applied for a shared cost AVC where an additional £100 of my net pay each month will go into my AVC Prudential pot through salary sacrifice. All good.

I’ve just realised that as my pay will be increasing in April, I will be pushed just over the boundary into the next bracket of 8.5% pension contribution rate. But, my salary sacrifice of £100 a month brings me back down within the 6.8% bracket.

So now I’m in a quandry: which side of this boundary is better? Am I better cutting down my AVC contributions and allowing myself to pay more into my LGPS pension by virtue of being in a higher band, or is putting extra money into the AVC pot still the wisest choice?

I know I should “ask a financial advisor’ but I am nowhere near rich enough for a financial advisor to be interested in working with me.

I’m just hoping for some thoughts and observations from people who know more than me.

Can anyone help at all or at least ask me some pertinent questions to set me on the right path?

Hi - whether you pay 6.8% or 8.5% you still 'bank' 1/49 of your whole gross salary after salary sacrifice. Looking at the lgps bands that's an annual gross salary ( after salary sacrifice) of 56.8k v 58k. So on the former you contribute 3.7k/ year and bank
£1.16k pension and for a 58k salary you contribute £4.9 k and bank £1.18k, due to the jump in % contributions. So you would contribute £1.2k for £20/year pension benefit, e.g you will never get the payback. So AVC are the way forwards in this scenario.

Amazing! Thank you so much for this.