Client Portal Independent financial planning advice for teachers

Teachers Logo
  • Home
  • Advice
  • About Us
  • Seminars
  • News
  • Downloads
  • Contact
Email
Home/News/Teachers AVCs/All about AVCs
loading...

All about AVCs

22/01/2019 Racheal Smith

Additional Voluntary Contributions (AVCs) for teachers are a means of boosting your financial health in retirement.  As the name suggests, these are additional payments you may wish to contribute voluntarily to your retirement fund.  It is a good idea to think carefully about AVCs alongside your retirement goals.  Retirement goals include when you hope to retire and what you hope to do when you retire.  Some questions to ask:

  • Do you want to retire early?
  • Do you want to continue working after you retire, with additional service?
  • Do you want to travel and pursue interests when you retire?
  • How much would help you feel financially comfortable when you leave work?

Putting you in control

Subject to the level of contributions accrued whilst paying into an AVC, it is possible if you are looking to retire early, that you could live off the Teachers’ AVC fund until you are old enough to take your main teacher’s pension without risk of reduction.  This may be especially important now that the NPA (normal pension age) has increased and CARE pension ages are linked to state pension ages.

It is also possible at the end of your career that you would want a reduction in responsibility.  You may even want to work part-time as you come to the last stages of teaching.  It is an exhausting career, and it is fair to consider reducing the work-load and the pace.  Your AVC fund could be used to supplement your income, making your working day more bearable.

An AVC typically becomes available at the normal minimum pension age, which is currently 55.  However, you should seek advice on this from your financial professional.

In short, AVCs offer you a choice at the end of your career that you might not otherwise enjoy.

AVCs equals Tax Savings

AVCs continue to be a means of making savings for your retirement that also offer tax savings.  The contributions are removed from your salary before your income tax is calculated.  This means that you pay less tax than you would have done. A monthly voluntary contribution of £150 could save you £30 based on basic rate tax.  Be aware that tax rules can change, and you should seek advice on the implications of taxation when choosing AVCs.

In short

Additional Voluntary Contributions are a tax-efficient means of paying forward into your retirement.  You can take your disposable income now and save it for a time when you might not want to, or feel you can, work.

There are other options for increasing your retirement benefits, which you can discover by looking on the Teachers’ Pension Scheme website or by speaking to a financial advisor.

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 offers advice on additional voluntary contributions. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.

Share this article:

  • Click to share on Facebook (Opens in new window)
  • Click to share on Twitter (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on WhatsApp (Opens in new window)
Posted under: Teachers AVCs, Uncategorised

Tagged in: AVCs, Pension Contributions



Make an enquiry

Please complete and send the short contact form below and we will come back to you as soon as possible.

    First Name

    Telephone

    Email

    Enter code captcha

    Message
    ifa logo
    Apple App Store Google Play Store
    • Site Map
    • Cookies
    • Legal
    • Privacy
    • Careers
    • Facebook
    • Google
    • Twitter
    • LinkedIn

    Teachers Financial Planning Limited is an appointed representative of LJ Financial Planning Limited which is authorised and regulated by the Financial Conduct Authority. Financial Services Authority firm registration number 552276. Content on this website is provided for information purposes only and should not be considered advice. The information contained within this website is subject to the United Kingdom regulatory regime and is therefore primarily targeted to consumers in the United Kingdom. Registered in England & Wales 07612896. Registered Office: St James Business Centre, Wilderspool Causeway, Warrington, WA4 6PS. Calls to 08452 69 69 90 cost 5p [or 5p per minute] plus your phone company's access charge.

    © 2011-2020 Teachers Financial Planning Limited.
    Website designed and developed by Carpe Diem
    This website uses cookies to improve performance: Find out more.