Click on a question to see the answer:
1 - What are AVCs?
AVCs are Additional Voluntary Contributions. You can pay extra contributions into BTPS, which are invested within a fund and which, adjusted for investment returns, are applied at retirement to provide additional pension and/or tax-free lump sum benefits. For more information please go to AVCs.
2 - How much can I contribute to AVCs?
There is no HMRC limit on the amount of contributions you can make or the number of pension schemes you can save in - although there are some limits on the amount of tax relief you can get. For more information please go to Contributions and tax relief.
3 - How do I pay for AVCs?
Your contributions will be deducted from your salary and paid into the investment funds of your choice. Alternatively, you may wish to pay your contributions under SMART Pensions. For more information please go to AVCs.
4 - How do I keep track of my AVC account?
You will receive fully detailed statements each year. You will also be able to see the value of your AVCs through the Pensions Portal. For more information please go to AVCs.
5 - Can I pay AVCs if I intend to retire before 65?
Yes, you can pay AVCs if you intend to retire before 65. There are no limits on the amount of contributions you can make but there are limits on the amount of tax relief you can receive on those contributions. For more information please go to AVCs.
6 - What happens to my AVC fund, if I die before retiring?
The full accumulated value of the fund will be paid to your beneficiaries, normally free of tax. For more information please go to AVCs.
7 - Can I draw my AVC funds and continue earning a pension?
Yes, you can take you AVCs prior to your main scheme benefits, provided you are over age 55. For more information please go to AVCs.
8 - I have built up an AVC fund in the BTPS. Can I transfer the value of that fund to a Self Invested Personal Pension (SIPP) scheme?
Yes, you can transfer. For more information please go to AVCs.
9 - When I retire (or draw my pension) can l take all of my AVC funds as tax-free cash if it is within the 25% limit, or can I only take 25% of my AVCs as tax-free cash?
HMRC allows you to take 25% of the capital value of your total BTPS benefits, including AVCs, as a tax free cash sum, capped at a quarter of the standard lifetime allowance. For more information please go to AVCs.
10 - If I take the 25% tax free lump sum from my AVC, can I leave the remaining 75% in the AVC fund?
When you take money from your AVC fund it is classed as a benefit crystalisation event and only 25% of that money can be taken as tax free cash, therefore if you wish to take 25% of your accumulated fund as tax free cash, the remaining 75% must be used to secure an annuity. For more information please go to AVCs.