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Your AVCs. Your future.

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Apply for an AVC plan

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Increase your AVC pot

It’s never too soon or too late to think about the difference you could make to your lifestyle later in life. In addition to your teachers’ pension scheme, Additional Voluntary Contributions (AVCs) could be just the thing to help your retirement pot go further.

Watch the videos to find out how AVCs could help you. We cover the basics and all the important details too. AVCs are investments so the value of your fund can go down as well as up so you might get back less than you put in.

Understanding your AVC

What's an AVC?

What is an AVC?

An Additional Voluntary Contribution, or AVC, is a way to save money for your retirement in addition to your main scheme pension.

It could help you to retire early or with more money. AVCs are invested in funds, so they have the potential to grow over time. It also means the value can go down as well as up and you may get back less than you put in.

If you’re a taxpayer, you get valuable tax savings on your contributions, as your employer takes them from your pay before its taxed. Tax savings will depend on your individual circumstances and rules can also change.

They’re easy to apply for and flexible. You can pay into an AVC regularly or pay a specific amount, and you can change your contributions at any time.

With AVCs you have a number of options for how to access your savings, currently from age 55, on retirement, or earlier if you’re in ill health.

Prudential have helped thousands of employees like you to use AVCs to save for their retirement.

We‘re a trusted provider, working in partnership with your main scheme to provide AVCs.

A quick introduction to AVCs and how they work

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AVCs and tax savings

AVCs and tax savings.

One of the reasons you might choose to save for your retirement with AVCs, alongside your main scheme pension, is the tax savings they offer.

If you’re a taxpayer, any regular contributions made into an AVC pot are taken from your salary before tax.

This means they cost you less from your take home pay than you might expect.

For example, as a 20% rate taxpayer, if you pay in £100, the cost to you will only be £80. This is because the money you would normally pay as tax goes straight into your AVC instead. If you pay tax at a higher rate, your tax savings will be higher. Tax savings will depend on your individual circumstances and rules can also change.

The impact of tax savings on your AVC

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How AVCs could help you

How an AVC could help you.

AVCs can be a smart way to save for your future because of the tax savings and they give you several options for how and when you retire. As your AVC is invested, it has the potential to grow.

But remember, the value can do down as well as up and you may get back less than you put in.

With an AVC you might be able to retire early, so you could spend more time enjoying the things you like.

Or you could still retire on your planned retirement date, but potentially with more money.

Or if you’d like to reduce your hours or start working flexibly, you may be able to use your AVC, currently from age 55, to supplement your salary if your scheme allows you to.

How AVCs could fit into your plans for the future

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Flexible paying in, flexible paying out

Flexible paying in, flexible paying out.

Lots of people’s circumstances change over time, so flexibility is important when it comes to saving for the future.

AVCs are separate to your main scheme pension. They give you more flexibility both when you’re saving, and when you want to access your money. This is because you don’t have to take your AVC at the same time as your main scheme pension benefits.

You can make regular or lump sum payments into your AVC direct from your pay, and you can change or stop your contributions at any time. Of course, any changes will affect how much money you eventually have, and you’ll still pay charges.

Currently when you reach 55, or possibly earlier if you’re in ill health, you’ll have several options for what to do with the money in your AVC.

You could do nothing, and leave your savings in your AVC where they could grow more. Remember, the value can go down as well as up and you may get back less than you put in.

You could cash it in. You can take 25% tax-free, and the rest is taxable.

You could also leave the money in your pot and take lump sums from it until your money runs out, or you choose another option. Each time you take a lump sum, 25% of it is tax-free and the rest is taxable.

You can use some or all of your AVC to take flexible cash or income (also known as drawdown). You’ll need to transfer to a different plan to choose this option.

Up to 25% of the money you transfer can be taken tax-free at the start, and any other withdrawals you make are taxable.

Or you could buy a guaranteed income for life which is taxable. This is known as an annuity. Potentially up to 25% of your pot can be taken tax-free at the time you buy your annuity.

If you want, you can choose a combination of these options that fit your needs. The tax you pay will depend on your individual circumstances and rules can also change.

From age 50, visit pensionwise.gov.uk or call 0800 280 8880 for further guidance from Pension Wise, or seek financial advice.

Choose how you build and access your AVC pot

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Investment choices made simple

1. Understand the investment options you have available

Default investment option

If you’d rather not make your own investment choice, this option could be for you.

Lifestyle option

This option is for members who want to take more or less risk than the default option. These lifestyles automatically target a specific outcome as you get closer to taking your benefits.

Choose your funds

If you’re comfortable choosing your own funds, you can choose up to ten from the risk rated funds available. This could be a good choice if you’re happy being in charge of your investments and fully understand the risks involved.

2. Read about the funds available to help you decide 

Check your Fund Guide for more information and to see which of these options are available to you. If you want information on a particular fund, click on the fund name in your Fund Guide to go to the fund factsheet.
It’s up to you to decide which investment option is right for your needs. Watch our 'Understanding your investment options' video for more information.
These options aren’t a recommendation from Prudential. If you’re still unsure, speak to a financial adviser.

Your Fund Guide

3. Make a note of your choice 

You need to choose which investment option you want before you apply. Once you’ve made a decision, write it down so you have it to hand when you apply.
And don’t worry, you can change your investment choice at any time in the future – before, or after you’ve applied.

AVCs are investments so the value of your fund can go down as well as up so you might get back less than you put in.

Before you apply for AVCs

It takes approximately 15 minutes to apply, and you can do this by printing off and returning the completed application form or by calling us.

To apply, you need:

bullet your payslip
bullet your investment choice

You'll need to call us if:

bullet you want to contribute more than 80% of your gross regular pensionable pay or exceed the £40,000 annual allowance

View an example payslip

You need to read the documents below before you apply. They have important information about the charges, costs, risks and benefits of the product and the funds to help you make a decision.

To download and save and/or print these documents for future reference, you should ensure that you have a PDF file reader program installed - Adobe has a free reader.

Important information

Prudential has given no advice on this investment. If you're unsure if this product is suitable, please get financial advice.

Apply

You can complete our application form with Acrobat reader. Read instructions on how to do this.

After you've completed the form, you'll need to print it off and sign it before posting it to us at - Prudential, Lancing, BN15 8GB.

Apply now

Once we've processed your application, we'll post a letter to you with details of the first contribtution from your salary. After you've got your confirmation letter you can register to manage your AVC plan online. Take a look at our online account user guide to see how you can get started.

Speak to a Retirement Specialist or apply by phone

You can also start your AVCs by calling our Retirement Specialist Team. They can’t give you advice, but they can help answer any questions you have about AVCs.

0800 151 3665 0800 151 3665

Monday to Friday from 9am to 5pm

To decrease your AVCs or for general enquiries about your existing AVC pot, please call our servicing team on 0345 600 0343. Lines are open Monday to Friday from 8.30am to 6pm.