Why Income Protection Should Be Your Priority Over an AVC
posted by Carmel Green protection specialist
Picture this: You’re in the prime of your career, earning a good salary, saving for retirement through an AVC (Additional Voluntary Contribution), and suddenly—life happens.
An illness or injury stops you from working, and with it, your income comes to a screeching halt.

Now, what’s more important: that extra money in your pension for a retirement you may not even reach, or the ability to keep the lights on today?
Let’s face it: your income is your greatest asset. Without it, everything else—including your AVC contributions—comes to a standstill.
Yet so many people prioritize building up their pension pot while completely overlooking how to protect the very thing that funds it in the first place.
The Case for Income Protection
Income protection is like a safety net for your salary. If you’re unable to work due to illness or injury, it provides a replacement income (typically up to 75% of your salary) until you can return to work or retire. Here’s why it’s crucial:
- Your Bills Don’t Stop: Mortgage, rent, groceries, utilities—all these expenses continue, even if your income doesn’t.
- Sick Pay Only Goes So Far: Most employers offer limited sick pay, and state illness benefits are often far less than what you need to maintain your lifestyle.
- Your Retirement Plans Are at Risk: If your income stops, not only will you struggle to contribute to your AVC, but you may also be forced to dip into your savings or pension early, jeopardizing your future.
- Tax Relief Sweetens the Deal: Income protection premiums are eligible for tax relief at your marginal rate, making it a cost-effective way to safeguard your financial stability.
AVCs: Great, But Not Urgent
Don’t get me wrong, AVCs are a fantastic way to top up your pension. They allow you to save tax-efficiently for retirement and ensure you’ll have a more comfortable lifestyle when you stop working. But an AVC is a long-term benefit, and it only pays off if you can keep contributing to it consistently over time.
If your income stops, your AVC contributions stop too. In the event of an illness or injury, your priority won’t be how much money you’re saving for retirement—it’ll be how to pay the bills today.
“But the Bank of Mum and Dad Will Help Me!”

Ah yes, the trusty Bank of Mum and Dad. Let’s imagine a 25-year-old starting their first AVC, confidently saying, “I don’t need income protection—if anything happens, Mum and Dad will sort me out.” But here’s the thing: does the Bank of Mum and Dad have unlimited funds to cover your rent, groceries, insurance, and Netflix subscription for months or even years? And what’s the interest rate on their generosity—weekly dinners, a guilt trip, or maybe even a “back in my day” lecture?
Now imagine this 25-year-old has an accident or serious illness. Suddenly, they’re not just asking Mum and Dad for a little help but relying on them entirely. Meanwhile, their AVC is sitting there, untouched and unhelpful, because it was never meant to cover the here and now.
It’s a harsh wake-up call, and one that could have been avoided with a simple income protection plan.
The Bottom Line
Income protection isn’t just a nice-to-have; it’s a must-have. It ensures that your day-to-day needs are covered, so you can continue to contribute to your AVC, pay your bills, and maintain your lifestyle no matter what life throws at you. Without income protection, your financial stability and retirement plans are built on shaky ground.
So, ask yourself: If your income disappeared tomorrow, what would you do? Rely on your savings? Depend on the Bank of Mum and Dad? Or would you rather have a plan in place that ensures you’re protected and in control?
Invest in income protection first. Once your income is secure, then you can focus on building your pension pot and planning for the future. After all, you can’t save for retirement if you don’t have an income to save with.
And unless Mum and Dad are ready to pay into your AVC too, it’s time to prioritize what really matters.