Contribution flexibility - paying more

Option to pay more

If you want to make additional pension savings to increase your pension benefits there are two tax efficient ways to do so from April 2015. These are Additional Voluntary Contributions (AVCs) and Additional Pension Contributions (APCs).

Additional Voluntary Contributions (AVCs)

AVCs allow you to pay more to build up extra savings for retirement.  Contact your pension fund for more information on the AVC fund(s) that they offer.

Additional Pension Contributions (APCs)

You can buy extra pension by paying APCs regularly, over a period of time, or you can buy extra pension by paying in a one-off lump sum. The maximum amount of additional pension you can buy from April 2015 is £6,500 (this figure will increase each year in line with the cost of living).

The amount it costs depends on how much extra pension you want to buy, the age you start paying the extra contributions and the length of time you want to pay them for.  In the new scheme you can only buy extra pension for yourself and not for additional dependants’ benefits.

You can make an application to purchase extra pension via an APC contract by completing an application form using the online calculator

 

Shared Cost APCs

In the new scheme, there is also the option of Shared Cost APCs.  Shared Cost APCs cover the amount of pension “lost” during periods of unpaid additional Maternity, Adoption and Paternity leave or periods of unpaid authorised leave of absence.

Shared cost means that if you want to cover such a period, the cost of buying the “lost” pension is shared between you and your employer, with your employer meeting 2/3rds of the cost (provided you make an election to buy the “lost” pension within 30 days of returning to work).

Shared cost APCs can be a one off lump sum or regular amount over a period of time. You can make an application to purchase “lost” pension via an APC contract by completing an application form using the online calculator