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Are you interested in retiring early or with more money? Whether you're close to retirement or it's still a long way off, it's never too early to start thinking about the kind of lifestyle you want when you stop working. And it's not too late to make a difference.
In addition to your main Local Government Pension Scheme (LGPS) benefits, Additional Voluntary Contributions (AVCs) could be just the thing to give you extra retirement benefits.
To understand how AVCs work, please read 'What are AVCs?'.
AVCs are investment based so the value can go down as well as up and you may get back less than you put in.
Case studies - how AVCs might work for you
These examples represent some typical situations and do not relate to any particular individuals or circumstances and they are not recommendations or advice. All figures are for illustration purposes only and are not guaranteed. The monthly contribution figures are gross which means they include the tax savings for AVCs and salary sacrifice shared cost AVCs. If you're paying tax in Scotland, your tax savings may be different.
John has competing priorities for his money
Current age: 32
LGPS retirement age: 68
Wants to retire: 65
Contribution years: 33
Monthly contribution: £40
Monthly tax savings with AVCs: £8
Monthly tax savings with salary sacrifice shared cost AVCs: £12.68
Potential growth: £16,300
Estimated AVC fund value: £32,100
John wants to start planning for retirement as he would like to stop work a couple of years before his retirement age of 68. He has two small children and struggles to find extra cash. However, John realises he can afford £40 a month by giving up the cup of coffee he usually buys on his way to work.
With potential growth of £16,300, this would give John an estimated AVC fund value of £32,100 when he wants to retire at 65.
Even though John is starting with a small amount, he knows he'll need to increase his AVCs to give him a bigger AVC pot. He does have peace of mind knowing that he is planning for his future.
Sarah feels like retirement is a long way off
Current age: 34
LGPS retirement age: 68
Wants to retire: 68
Contribution years: 34
Monthly contribution: £50
Monthly tax savings with AVCs: £10
Monthly tax savings with salary sacrifice shared cost AVCs: £15.88
Potential growth: £21,900
Estimated AVC fund value: £42,300
Sarah doesn’t think that she needs to worry about planning for retirement. However she looks at what AVCs could give her if she contributes £50 a month until she retires and she's surprised to see how much making AVCs could add up to.
With potential growth of £21,900, Sarah would have an estimated AVC fund value of £42,300 when she wants to retire at 68.
This could make a difference to Sarah's lifestyle in retirement.
Alex wants to retire early
Current age: 47
LGPS retirement age: 67
Wants to retire: 65
Contribution years: 18
Monthly contribution: £130
Monthly tax savings with AVCs: £26
Monthly tax savings with salary sacrifice shared cost AVCs: £41.48
Potential growth: £12,500
Estimated AVC fund value: £40,600
Alex would like to retire before he’s 67 if possible. If he starts AVCs now, he has worked out that he could use his AVC pot to retire two years early by transferring it to a different product.
With potential growth of £12,500, Alex would have an estimated AVC fund value of £40,600 at 65 to transfer to a new product offering partial withdrawals.
He’d then be able to take partial withdrawals to help towards the loss of his salary and defer taking his main LGPS benefits until he's 67.
Priya is worried it’s too late to start an AVC plan
Current age: 55
LGPS retirement age: 67
Wants to retire: 67
Contribution years: 12
Monthly contribution: £150
Monthly tax savings with AVCs: £30
Monthly tax savings with salary sacrifice shared cost AVCs: £47.88
Potential growth: £5,940
Estimated AVC fund value: £27,500
Priya is keen to save some extra money for her retirement but isn’t sure what the best option is for her. She’s also worried that it might be too late to make a real difference.
Priya finds out that by paying into AVCs, she benefits from tax savings.
With potential growth of £5,940, Priya would have an estimated AVC fund value of £27,500 to take she retires at 67.
She'd be able to take a 100% tax-free lump sum assuming it would fall within overall HM Revenue & Customs maximums, is less than 25% of her main LGPS benefits and that she's taking her main LGPS benefits at the same time.
Hannah had a career break so she has no AVC plan
Current age: 60
LGPS retirement age: 67
Wants to retire: 65
Contribution years: 5
Monthly contribution: £350
Monthly tax savings with AVCs: £70
Monthly tax savings with salary sacrifice shared cost AVCs: £111.88
Potential growth: £2,200
Estimated AVC fund value: £23,200
Hannah has had a number of breaks in her career and never got around to looking at what income she would have when she retires. She decides to start AVCs as she feels that any extra she can put away now could help her in five years’ time.
With potential growth of £2,200, Hannah would have an estimated AVC fund value of £23,200 when she wants to retire at 65.
This will give her just a little extra when she retires.
Adam is very close to retirement, and would like to benefit from tax-free cash
Current age: 63
LGPS retirement age: 65
Wants to retire: 65
Contribution years: 2
Monthly contribution: £2,000
Monthly tax savings with AVCs: £800
Monthly tax savings with salary sacrifice shared cost AVCs: £839.98
Potential growth: £1,980
Estimated AVC fund value: £49,900
Adam is 63 and doesn’t have an AVC plan. He would like to benefit from the tax savings available with AVCs in the short time before he retires. He works out that he could afford to save about a third of his salary each month - £2,000.
With tax savings and potential growth, Adam could have an estimated AVC fund value of £49,900 when he retires at 65.
Adam will be able to take his AVC pot as a 100% tax-free lump sum because it falls within overall HM Revenue & Customs maximums and is less than 25% of his main LGPS benefits.
AVCs are investment based so the value can go down as well as up and you may get back less than you put in.
The figures do not take inflation into account which means that the purchasing power of your fund value will be reduced in the future. The figures assume 5% growth each year. The figures assume annual management charges of 1% each year. Actual charges may differ. Charges can vary in the future and may be higher than they are now. The impact of taxation and any tax relief depends on your individual circumstances and may change in the future.
Default investment option
For members who don’t want to choose themselves. Check your Fund Guide to see if there's a default investment option.
Lifestyle options
if available
Lifestyling aims to provide long term growth with automatic switching of your money into different funds to protect the value of your AVC pot as you get closer to taking your benefits. Have a look at your Fund Guide to see if there's a lifestyle option.
Choose your funds
This is the full range of funds available to you. You can choose any combination of these funds – up to a maximum of ten in total.
To help you choose, read our 'Interactive guide to pension funds'.
2. Read about the funds available to help you decide
- Type your LGPS name into the box below to select your Fund Guide. It has important information to help you decide how you want to invest your AVC pot. The options available are not recommendations by Prudential.
- When choosing fund(s) there are some things you should think about, including, how long you want to invest for and your attitude to risk.
- If you want more information on a fund, click on the fund name in your Fund Guide and it will take you to the fund factsheet.
Choose your Fund Guide
- Bedfordshire Pension Fund Berkshire Pension Fund Bexley Council Buckinghamshire County Council Cambridgeshire County Council Pension Fund Cardiff & Vale of Glamorgan Pension Fund City and County of Swansea Pension Fund City of London Pension Fund Clwyd Pension Fund Croydon Council Pension Fund Cumbria Pension Scheme Derbyshire County Council Pension Fund Devon County Council Pension Fund Dorset County Council Pension Fund Durham County Council Pension Fund Dyfed Pension Fund East Riding Pension Fund East Sussex County Council Pension Fund Environment Agency Active Pension Fund Essex County Council Pension Fund Falkirk Council Pension Fund Fife Council Pension Fund Gloucestershire County Council Pension Fund Greater Manchester Pension Fund Hampshire Pension Fund Highland Council Pension Fund Isle Of Wight Council Pension Fund Kent County Council Pension Fund Lancashire County Pension Scheme Leicestershire County Council Pension Fund Lincolnshire County Council Pension Fund London Borough Of Barking & Dagenham Pension Fund London Borough of Barnet Pension Fund London Borough of Brent Pension Fund London Borough of Camden Pension Fund London Borough of Enfield Pension Fund London Borough of Hackney Pension Fund London Borough of Haringey Pension Fund London Borough of Harrow Pension Fund London Borough Of Havering Pension Fund London Borough Of Hillingdon Pension Fund London Borough of Islington Pension Fund London Borough of Lambeth Pension Fund London Borough Of Merton Pension Fund London Borough of Sutton Pension Fund London Borough Of Wandsworth Pension Fund London Pensions Fund Authority Lothian Pension Fund Merseyside Pension Fund Norfolk County Council Pension Fund North East Scotland Pension Fund North Yorkshire County Council Pension Fund Northamptonshire County Council Pension Fund Northern Ireland Local Government Pension Scheme Northumberland County Council Pension Fund Nottinghamshire County Council Pension Fund Orkney Islands Council Pension Funds Oxfordshire County Council Pension Fund Powys County Council Pension Fund Rhondda Cynon Taff Pension Fund Royal Borough of Kensington & Chelsea Pension Fund Shetland Islands Council Pension Fund Shropshire County Pension Fund Somerset County Pension Fund South Yorkshire Pension Fund South Yorkshire Transport Authority Pension Fund Strathclyde Pension Fund Surrey County Council Pension Fund Tayside Pension Fund Teesside Pension Fund Tyne & Wear Pension Fund West Midlands Pension Fund West Yorkshire Pension Fund Wiltshire Pension Fund
Not sure which Local Government Pension Scheme you are a member of?
3. Make a note of your choice
- You can make a note of your choice now so you have it to hand when you apply.
- Don't worry, you can change your mind whenever you want - before and after you've applied.
As your AVC pot is an investment the
value can go down as well as up and you may not get back the amount you put in.
Apply to start your AVCs
To apply online, you will need to have:
- bullet approximately 10 minutes
- bullet your LGPS name (on your statement)
- bullet your payroll address
- bullet decided how much to pay in
- bullet decided on your investment choice (default investment option (if available), lifestyle option (if available) or self-selected funds)
- bullet your payslip (National Insurance number, reference number, pay, etc.)
You will need to call us if:
- bullet you are a local councillor
- bullet you want to make a one-off contribution through your pay and are not paid monthly
Read these documents as they give you important information about the key risks and benefits of the product to help you make a decision
We recommend that you download and save and/or print all these documents for future reference. Read instructions on how to do this.
Apply
I confirm I have read my employer information pack.
Click the relevant 'Apply now' button to complete our secure online form.
Once you start this application, any data you enter will be temporarily stored by Prudential and its business partners. The data will be deleted if you don't submit the form, unless you've asked us to contact you to help you complete it.
If JavaScript has been disabled within your browser, the content and functionality of the online form might be limited or unavailable. See instructions for enabling JavaScript. We would also recommend you upgrade to the latest version of your internet browser for an optimal experience.
After you apply, you will receive a confirmation email and then you will be able to register to manage your plan online - see our Online account user guide.
Speak to a Retirement Specialist or apply by phone
If you have any questions about starting or increasing AVCs, speak to one of our friendly Retirement Specialists based in our Reading office.
Monday to Friday from 9am to 6pm
Although they're not able to give you financial advice, they can give you factual information and chat to you about your personal situation.
For general enquiries about your existing AVCs, please call our servicing team on 0345 6000 343. Lines are open from 8.30am to 6pm Monday to Friday.
* We will call you from 0800 316 4411 when we contact you about your enquiry.