Additional Voluntary Contributions

Additional Voluntary Contributions (AVCs) are set up by an employer and are designed for members of a company pension scheme to increase contributions to help potentially boost retirement income.

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.

  • bullet Contributions to an AVC qualify for tax relief.
  • bullet An AVC aims to increase your retirement income alongside your company pension scheme.
  • bullet You can transfer your AVC and you can stop, start and vary your contributions at any time.
  • bullet You can invest your contributions in a range of funds.
Risks and considerations
  • bullet This product is only available through select employers and the range of funds available to you will depend on the scheme you join.
  • bullet The value of any investment can go down as well as up so you may not get back what you put in.
  • bullet Tax relief will depend on your individual circumstances and is subject to change in the future.
  • bullet Charges will be applied and if you stop, or reduce, contributions this will impact your retirement benefits.

There are various reasons why you could consider saving into an AVC. For example:

  • Tax-efficient - contributions to an 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.
  • 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 subject to overall limitations.
  • Access additional benefits - you can buy additional pension benefits in some company pension schemes such as added years AVCs. Check your company pension scheme to find out more.
  • Portable - you may be able to 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 of 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.

Pensions and tax

Paying into an AVC plan attracts tax relief but there is a limit on how much you can pay in. This is known as the Annual Allowance. You will usually pay tax on any contributions that exceed the Annual Allowance.

There is a limit to the amount of benefits you can take from your tax relieved pension savings before you incur a tax charge - this is known as the Lifetime Allowance. If the benefits you take exceed your available Lifetime Allowance, a tax charge will be due on the excess. 

Understanding all of the tax rules can be very complicated so we've prepared a guide to show how this may affect you. Our Questions & Answers document provides information such as:

  • Tax relief on pension contributions and the limits
  • Annual Allowance
  • Tapered Annual Allowance
  • Money Purchase Annual Allowance
  • Lifetime Allowance
  • Pensions Protection

You can also get more information on the website by visiting

You can read more about the tax benefits of saving in a pension.

Review the Prudential AVC plans available

If you are a member of a company that has a Group AVC plan with Prudential, please visit GAVC. Alternatively, check with your employer to see if they offer a plan.

Are you an existing customer?

See our dedicated AVC page in the Existing Customers section where you can log in to your individual plan and find out how to top this up.

If you already have an AVC, read about the benefits of topping up.

Contact us

Please speak to your employer to see if they offer an AVC scheme through Prudential before contacting us.

0345 600 0343

A pension scheme provided (sponsored) by an employer for its employees. Company pension schemes can be defined benefit schemes (final salary schemes) or defined contribution schemes (money purchase schemes).

The UK government encourages you to save for your retirement by giving you tax relief on pension contributions. Tax relief works by reducing your tax bill or increasing your pension fund.

Important information

We are not recommending one product over another. We recommend you seek financial advice if you’re unsure about what product could be right for you. The information above is based on our understanding of current taxation, legislation and HM Revenue & Customs practice, all of which is liable to change without notice. For more information please visit