AVCs
Seven Good Reasons to Choose AVCs
1. Help from the taxman.
Paying into your AVC gives you the chance to keep the taxman’s hands off your money. For example, adding £200 per month to your pot will only cost you £160 if you’re a basic rate taxpayer and even less if you’re a higher rate taxpayer. The remainder of the contribution comes from tax relief, which means that, subject to limits, the tax you would normally have to pay to the taxman will go straight into your AVC pot. What a great way to help boost your retirement savings!
2. Flexible
You stay in control of your contributions to make sure payments suit your needs. You can start, stop and re-start your contributions at any time. You can increase or decrease your contributions at anytime (please note that decreasing will affect your benefits at retirement).
3. Invested to suit you
Your AVC pot is invested, based on your choices, to suit your needs and circumstances. Whether you seek investment growth potential or just want to try to maintain the value of your contributions. The value of an investment may fluctuate and is not guaranteed. You may not get back the full amount of your original investment. What you get back will depend on the fund chosen and how it performs.
4. Tax-free cash lump sum
You can potentially take all of your pot as a tax-free cash lump sum (provided that the tax-free cash lump sum isn’t worth more than 25% of the value of all your pensions combined). Just think what difference that could make to your lifestyle when you retire.
5. Guaranteed regular income for life
You can also use some, or all, of your pot to provide a guaranteed regular taxable income for the rest of your life. You decide what you want to do when you retire.
6. Easy
It’s quick to set up and can be done paperless over the phone. No direct debits need to be set up as contributions are automatically taken from your salary. All arrangements are sorted out for you, by Prudential, with your employer. So you don’t need to worry.
7. A partner you can trust
We’re the UK’s No.1 AVC provider and the official AVC provider to the Teachers, Universities and Local Government Pension Schemes. We’ve been helping public sector employees save for their retirements for over 20 years. So you know we are a partner you can trust.
The above is based on our current understanding of taxation rules as at February 2011 which may change and the tax impact will depend on your individual circumstances
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