What's an AVC?
- Additional Voluntary Contributions, or AVCs, are a separate pot of money you can build up alongside your employer’s pension scheme to give you extra retirement benefits.
- If you’re a taxpayer you get valuable tax savings on your regular contributions, as your employer takes them from your pay before it's taxed.
- If you don’t pay tax you have not been getting tax savings on your regular contributions. This changes from 6 April 2024:
- From 6 April 2024, if you are paying personal contributions into the scheme and you are not paying tax on your salary you can claim a tax rebate from HMRC. Any claim will be made at the end of the tax year in respect of the previous tax year.
- If you are a non-tax payer and exchanging part of your salary in return for your employer putting the equivalent value into your pension pot your situation will not change. You will not get a tax rebate from HMRC in respect of these employer contributions.
- They’re easy to apply for and flexible; you can change your contributions at any time to suit your circumstances.
- 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 so you might get back less than you put in. When it comes to choosing where to invest your AVCs, there’s no need to feel overwhelmed. The 'Investment choices' section of this site will take you through your investment options to help you make a decision.
- The size of your AVC pot will depend on how much you pay in, how long you pay in for, the impact of costs, charges, and how well the fund(s) you invest in perform. Even if you stop your contributions, charges will continue to be taken.
- You have a number of options to choose from when you decide to take money from your AVC pot, which you can currently do from age 55 (57 from 6 April 2028, unless you have a protected pension age), or possibly earlier if you're in ill health. This would usually depend on you meeting the ill-health requirements of your main scheme pension.
For more information on the risks, benefits, charges and costs of the product and funds, please read your Key Features document and your Fund Guide to help you make a decision. These are available online or from your employer/scheme administrator.
More information
Existing customers
It’s important to regularly review your AVC pot to make sure you’re on track to achieve the lifestyle you want when you stop working.
Flexible paying in, flexible paying out
Life isn't always as simple as we'd like it to be. Some things take us by surprise and those surprises.
How AVCs could help you
It’s important to plan for your future. You may need more money than you think when you retire as.
Investment choices
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.
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.
"Prudential" is a trading name of Prudential Distribution Limited. Prudential Distribution Limited is registered in Scotland. Registered Office at 5 Central Way, Kildean Business Park, Stirling, FK8 1FT. Registered number SC212640. Authorised and regulated by the Financial Conduct Authority. Prudential Distribution Limited is part of the same corporate group as the Prudential Assurance Company Limited. The Prudential Assurance Company Limited and Prudential Distribution Limited are direct/indirect subsidiaries of M&G plc, a company incorporated in the United Kingdom. These companies are not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in the United Kingdom.