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Can I take SSSO-AVC before company pension?

Retirement | Annuities Helpful? 6

Asked by johnrees, submitted 25 September 2012.

Open Quote I have just taken voluntary redundancy on 1 September. I have a final salary pension of 27 years and also £22,500 in an AVC scheme with Aviva. I have read about a scheme called State Sptreading Scheme Option (SSSO) and want to know if it could apply to me. My official state pension age is 1 March 2015 so I have 2 1/2 years before I receive my state pension. Do I have to take my company pension in order to get SSSO?End Quote

Answered by Justin on 26 September 2012

In theory it's possible to take benefits from an Additional Voluntary Contribution (AVC) pension scheme before or after you take benefits from your occupational pension, so this could allow the possibility of using the State Spreading Scheme Option (SSSO) without taking your company pension.

However, it all depends on whether your pension scheme rules allow this (just because HMRC rules do it doesn't automatically mean your pension scheme does), so you'll need to check with your employer's pension scheme administrator.

SSSO allows you to withdraw a temporary income from an occupational pension/AVC (if the scheme allows it) equal to up to 125% of a single person's basic state pension (I believe) until the state pension age, at which point the balance of the fund is used to provide a conventional annuity.

Alternatively, you might just decide to take your tax free cash entitlement from the AVC and buy an annuity now - if your scheme rules allow this.

It's the usual retirement gamble of receiving less income now but for longer or more in future for a shorter overall period of time. There's no right or wrong as such, it depends on how long you think you'll live and prevailing annuity rates.

Please note this answer does not constitute a recommendation or financial advice and should not be relied upon when making specific investment or other financial decisions. You should always undertake your own research into whether a product or service is appropriate for your needs and, if necessary, use a qualified professional adviser.

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Readers' Comments (1) - To post a comment please register or login .

Comment by johnrees at 7:46pm on 26 Sep 2012:

justin thanks for your help i will look to my pension provider for his information john