AVC
What is an Avc and how does it work?
How does an Avc work?
An AVC (Additional Voluntary Contribution) is a way to save extra money for your retirement on top of what your pension scheme provides. You choose how much you want to contribute, and it’s deducted from your salary before tax, which means you save on your tax bill too. Over time, your contributions grow in a fund that you can use when you retire. It’s a flexible way to boost your retirement income and take control of your future.
Benefits of an AVC
Tax Relief: Get up to 40%* tax relief on your contributions, making it a tax-efficient way to save.
Tax-Free Growth: Your contributions grow tax-free under current legislation, unlike most other savings methods that incur tax.
Tax-Free Lump Sum: At retirement, you may take a portion of your fund as a tax-free lump sum, subject to Revenue rules.
Flexibility: Contribute what you can afford and adjust your contributions anytime to suit your circumstances.
Early Retirement: Plan for early retirement, starting from age 50**.
I Used to Pay into an AVC but Stopped – What Now?
If you’ve stopped contributing to your AVC (known as a “paid-up” AVC), it means you’re no longer adding money to the fund, but the money you’ve already saved is still there.
It remains invested and continues to grow until you access it, usually at retirement.
Some people pause their AVCs to focus on other financial priorities, or they may have signed up without fully understanding how they work and later canceled them.
The good news is your savings haven’t gone anywhere, and they’re still working for you.
If you have a dormant AVC, the smartest move is to contact your provider to restart it. Since you’ve already covered the setup fees, restarting allows you to make the most of the investment and the service you’ve already paid for.
It’s a simple way to get your retirement savings back on track
*Terms and conditions apply. Revenue rules and limits are subject to change.