Additional Voluntary Contributions Overview
An Additional Voluntary Contribution (AVC) plan is set up by an employer for employees to make further contributions to potentially build up additional retirement benefits. It's designed to sit alongside the main company pension scheme.
For most AVCs, the contributions are invested and so, the longer you pay into an AVC and the higher the contribution, the higher the additional fund you will build up. This additional fund can usually be taken as an additional income and/or a lump sum when you come to retire. You will need to check with the administrators of your main company pension scheme what options are available for the AVC fund. You might also be able to take the money from age 55 (57 from 6 April 2028) either before, at the same time as, or after your main scheme (subject to the scheme rules).
An AVC is an investment based product and so the value can go down as well as up and you might get back less than you put in. What you get back will depend on the fund chosen and how it performs.
Check with your employer to see if they offer an AVC plan.
Features of AVCs
- There may be lower administration charges compared to investing into a separate Personal Pension scheme.
- Flexibility - you can stop or vary the amount you pay. But bear in mind that charges will continue to be deducted and will affect your benefits at retirement.
- Tax relief on your contributions (up to certain limits). More information can be found here.
The above is based on our current understanding of current tax legislation, HM Revenue & Customs practice and scheme rules, all of which may change without notice. The impact of taxation (and any tax relief) depends on individual circumstances.
Free Standing Additional Voluntary Contributions (FSAVCs)
FSAVCs are similar to additional voluntary contributions and are also designed to sit alongside your company pension. The difference is that instead of the employer setting up the plan and deducting contributions from your salary, you set it up through a pension provider and the FSAVCs are collected from you directly.
Who offers AVCs?
If you're a member of a public AVC scheme, please visit your AVC scheme website below.
If you're a member of a company that has a Group AVC plan with Prudential, please visit GAVC. Or check with your employer to see if they offer a plan.
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