AVCs
Additional Voluntary Contributions are a way of paying extra into your pension in order to increase your benefits in retirement.
It is important to think carefully and in good time about the amount of pension you will need in retirement, and, if possible, to maximise this. You should also review your plans from time to time, to ensure that any changes you need to make are effective and appropriate to your life situation.
AVCs are particularly effective because:
- contributions are deducted directly from your pay
- you get tax-relief at your highest rate on all contributions
- any growth in your AVC investment fund is free from Income Tax and Capital Gains Tax
- investment management fees through Plan AVC arrangements are competitive
- you can use your AVC fund to increase your tax-free cash lump sum on retirement or to offset the effects of a reduced early retirement pension
Many people find that an independent financial advisor (IFA) can help them in this process. To find an IFA in your area you can use the "unbiased" website at: http://www.unbiased.co.uk/