There are more ways to increase your pension than you might think. You may have heard about Additional Voluntary Contributions (AVCs) run by Prudential, which is an extra fund that you pay through your salary. This is a fund that can increase or decrease in value as Prudential will use the money as an investment fund that may or may not do well. The investment risk is usually relatively low but is something worth discussing with an advisor.
AVCs are not the only route you could take to adding to your financial comfort in retirement. You could also choose to make use of the flexibilities designed into the Teachers’ Pension Scheme. You could opt for:
Faster accrual: you can add to your pension at a higher rate than the standard 1/ 57 of pensionable earnings.
Additional Pension: you can elect to increase your annual pension, either by a one-off lump sum payment into your pension or through monthly deductions from your salary. You are in control of how much additional pension you purchase, though there is a maximum and the amount obtained must be in multiples of £250.
Your ability to opt into these flexibilities depends on the arrangement of your scheme, whether final salary or CARE.
If you wish to apply for flexibilities, you can do this through the Teachers’ Pension Website. The easiest way to manage your pension is by signing up for an MPO (My Pension Online) account. Here you will also be able to view the maximum amounts you can pay into your pension.
The content in this article was correct on 14th January 2018. You should not rely on this article to make important financial decisions. Teachers Financial Planning does offer advice on AVC schemes. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.