Additional Voluntary Contributions
Invest in a range of funds
Additional Voluntary Contributions (AVCs) are designed for those of you who are members of a company pension scheme but want to increase the contributions you make to help boost your income in retirement. You can see the benefits of supplementing your pension with our AVC calculator.
And with average life expectancy increasing, saving in a pension and topping it up could be a great way to help build up a larger fund for when you take your benefits. If you already have an AVC, read about the benefits of topping up.
- Tax-efficient* - AVCs qualify for tax relief like other pension contributions do. Subject to HM Revenue & Customs (HMRC) limits, each £100 you invest into your pension will only cost you £80 (as a basic rate taxpayer), as the remaining £20 that you would normally pay to the taxman will be paid into your pension as tax relief instead. This will be higher if you are a higher/additional rate tax payer. Read more about the tax benefits of saving in a pension.
- Help boost your retirement income - your AVC plan aims to increase your retirement income and sit alongside any company pension scheme you may have. You can also take a tax free cash lump sum, just like other pensions. See our AVC calculator to find out how an AVC plan can help enhance your retirement income.
- Access additional benefits - you can buy additional pension benefits in some schemes such as added years AVCs. Check your scheme to find out more.
- Portable - you can transfer your AVC plan to your new employer if you move jobs. We suggest you seek financial advice before transferring your benefits.
- Flexible - you can vary, stop and start, and make regular and/or lump sum payments at any time. Note that charges will still continue to be applied, and if you decrease or stop payments, this will impact on your benefits at retirement.
- Access to a range of funds - your additional pension contributions can be invested in a range funds, although the funds actually available to you may depend on the scheme you join. Bear in mind that the value of your investment may go down as well as up and you may not get back your original investment.
*This is based on our understanding, as at December 2014, of current taxation, legislation and HM Revenue & Customs practice, all of which is liable to change without notice. The impact of taxation (and any tax relief) depends on individual circumstances.