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 can cost money, so flexibility is important when it comes to saving for the future.
You can make regular or lump sum payments into your AVC pot direct from your pay and you can change them at any time online. If you reduce or stop your contributions, it'll affect how much money you eventually have and you'll still pay charges.
There’s no minimum contribution amount.
Depending on pension allowance limits, you can pay in up to 100% of your pensionable pay each month after deductions (such as National Insurance and your Teachers' pension scheme contribution) are taken. If you want to contribute more than 80% of your pensionable pay, please call us on 0345 600 0343. Lines are open Monday to Friday from 8.30am to 6pm. We might record your call for training and quality purposes. To find out more about how we use your personal data please visit pru.co.uk/mydata
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 on 6 April 2028 unless you have a protected pension age), or possibly earlier if you're in ill health. And because your AVC pot is separate to your pension, you don’t have to take it at the same time as your Teachers’ pension scheme benefits.
- Take flexible cash or income
You can do this by moving your money into a drawdown plan. In most cases you can take up to 25% of your money tax-free, you’ll need to do this at the start. You can then dip in and out when you like or take a regular income. This may be subject to income tax.
- Get a guaranteed income for life
You can buy an annuity – it pays you an income (a bit like a salary) and is guaranteed for life. These payments may be subject to income tax. In most cases you can take 25% of the money in cash, tax-free. You’ll need to do this at the start and take the rest as income.
- Cash in your pot all at once
You can take your AVC pot as a single lump sum. Normally the first 25% is tax-free but the rest may be subject to income tax.
- Take your cash in stages
You can leave the money in your AVC pot and take out cash lump sums whenever you need to – until it’s all gone or you decide to do something else. You decide when and how much to take out. Every time you take money from your AVC pot, the first 25% is usually tax-free and the rest may be subject to income tax.
- Leave your pot where it is
You don’t normally have to start taking money from your AVC pot when you turn 55 (57 on 6 April 2028 unless you have a protected pension age). It’s not a deadline to act.
- Take more than one option
You don’t have to choose one option – you can take a combination of some or all of them over time.
You might be able to take your benefits earlier than age 55 if you’re in ill health.
Regardless of your age, if you have a life expectancy of less than one year due to ill health, you may be able to take your pension pot tax-free.
For more information, please contact us.
Important information
- There are specific rules which apply to flexible cash or income. Your scheme administrator will be able to tell you about them.
- The tax you pay will depend on your circumstances. Rules can also change.
- Whatever you decide to do, you should shop around and find what’s best for you. You don’t have to stay with us. Different providers offer different products, some of which may be more appropriate for your individual needs and circumstances.
- You should get guidance or financial advice to help you with this decision.
Pension Wise
Pension Wise is a free, impartial guidance service available to those aged 50 and over. It's offered by the Government to help you understand your options at retirement. You can find out more at moneyhelper.org.uk/pensionwise or by calling 0800 280 8880 to book a phone or face-to-face appointment. We recommend that you use this service to help you understand your options.
More information
What's an AVC?
An AVC plan is a separate pot of money you build up alongside your Teachers’ pension, that aims to give you extra retirement benefits.
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.
How AVCs could help you
It’s important to plan for your future. You may need more money than you think when you retire.
"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.