AVC Pensions

Many members of pension schemes want to contribute more money to their scheme in order to augment benefits. These contributions are known as Additional Voluntary Contributions and are eligible for tax relief in the same way as the normal contribution. AVC plans are always money purchase but in many instances the investment choice is limited.

Some members did not want to make their additional contributions to their own scheme and chose rather to pay their contributions to an Insurance run scheme known as a Free Standing AVC.

Now that it is possible to be a member of a personal pension and an occupational scheme at the same time, the need for AVC schemes has reduced and the personal pension has taken over as a more flexible vehicle. Trustees of Occupational Schemes are no longer obliged to offer an AVC scheme

Superannuation Schemes such as that offered to Teachers, Local Authority or the medical profession used to  offer members the opportunity of securing additional service within the scheme by the purchase of “Added Years” – although on the surface such schemes looked expensive, in many cases they were  advantageous particularly if a members earnings increase in the years close to retirement.