Prudential - Group AVC Plan
If you are already a member of the Wiltshire Pension Fund you will realise the importance of saving for your retirement. But a financially secure retirement isn't something you should take for granted, that's why it's a good idea to regularly review your pension arrangements.
Can you answer "yes" to any of these questions?
- Do you want to retire early?
- Do you have gaps in your pension contributions because you've changed jobs?
- By the time you retire will you have less than 40 years' service with your employer?
- Have you had or are you considering a career break?
- Would you like to provide additional benefits for your spouse or other dependents?
If so, then you should consider paying into an Additional Voluntary Contribution (AVC) plan to top-up your pension.
What is an AVC plan?
It's a top-up to your company pension and a cost effective way to increase your pension fund.
What will I get when I take my benefits or retire?
This will depend on the type of company pension you have and the rules of the plan. AVCs generally build up a separate fund to buy extra benefits. The amount of benefits you'll receive will depend on how much you've contributed and how well your investment has performed. The value of the AVC plan will go up and down and you may get back less than invested.
Advantages of an AVC plan
Flexibility - you can make single contributions, allowing you to make payments from any windfalls or bonuses you may receive as well as regular monthly contributions. You can vary or stop contributions at any time allowing you to make contributions that fit in with your finances. Although if you stop or reduce your contributions your future pension benefits will be less than had you maintained your contributions at the same level.
Tax efficiency - your contributions are taken from your salary before it's taxed. This reduces the amount of salary you're taxed on. For example, if you decide to pay an extra £50 per month into your AVC this will effectively only cost you £40, as the £10 that would otherwise go to the taxman will get paid into your AVC plan. If you're a higher rate taxpayer you'll receive even more tax relief on your contributions. Tax rules may change in the future.
Tax-free cash - new pension rules introduced in April 2006 (known as A-Day) have made AVC plans even more flexible. It's now possible to take up to25% of your AVC fund as tax-free cash, assuming your plan rules have been amended. Some AVC plans may even allow you to take more than 25% of your AVC fund as tax-free cash (depending on the plan rules). Please refer to your specific plan rules for details.
Interested?
You can pay additional pension contributions to the in-house AVC scheme as run by The Prudential Assurance Company.
- For more information visit the Prudential website or telephone 0845 607 0077 (Mon-Fri 9am-6pm).
- Find all the important information, including the benefits and risks of the AVC scheme in Prudential's Key Features and Guide to Fund Options documents.
- To start your AVC you can telephone Prudential on 0845 6070077 (Mon - Fri 9am - 6pm) or download an application form.
