Skip to Main Content

Additional Voluntary Contributions (AVCs)

You may pay AVCs to top up your own pension, or your dependant’s pension or to provide additional life cover. In this case you can invest money, deducted directly from your pay, with an AVC provider. Any AVCs which you pay are invested separately in funds managed by the AVC provider. You have your own personal account which, over time, builds up with your contributions and the returns on your investment. You have the option to transfer your in-house AVC fund to another arrangement whilst actively contributing to the Scheme. At retirement you may use your AVC fund to buy an additional pension or to increase your lump sum, subject to both Scheme and tax limits. Prudential is the in-house AVC provider for new contributors. Equitable Life is also an in-house AVC provider but is no longer available for new contributors.

It should be noted that the return on these AVC investments depends on the contributions paid, the performance of the investments and on interest rates at retirement. There is no guarantee that any particular level of benefit will be available at retirement.

You can contribute 50% of your regular pensionable pay to the in-house AVC arrangement. AVCs are deducted directly from your pay and tax relief (at your highest rate) is automatically given through payroll. This means that tax is calculated on your pay after your Scheme and AVC contributions have been deducted.  You may not make lump sum contributions to the AVC fund.

When you reach retirement you may use your in-house AVC fund in the following ways:

    •  Buying an annuity

      This is where an insurance company, bank or building society of your choice takes your AVC fund and pays you a pension in return.

      You can do this at the same time as you draw your Scheme benefits or you can delay payment up until the day before your 75th birthday. An annuity is paid completely separately from your Scheme benefits.

      The amount of an annuity depends on several factors such as your age and interest rates. You can also choose the type of annuity which you want e.g. a flat rate pension or one that increases each year, and whether you want to provide for dependants’ benefits on your death.

    •  Buying a top-up Scheme Pension

      If you retire with immediate payment of your benefits you may be able to use some or all of your AVC fund to buy a top-up pension from the Scheme for yourself and any dependants.

    •  Taking your AVCs as cash

      Current Scheme regulations allow you to take your AVC fund at retirement, subject to tax limits, in whole or in part as tax free cash. If you decide to defer drawing your AVC until after retirement you can normally only have up to 25% of your AVC fund as a lump sum.

    •  Transfer your AVC fund to another arrangement

      You can transfer your AVC fund to another pension scheme or arrangement. 

    Leaving the Scheme before retirement

    If you leave before retirement, your AVC contributions will cease. The value of your AVC fund will continue to be invested until it is paid out. Your in-house AVC scheme is similar to your main Scheme benefits: it can be transferred to another arrangement along with or independently from your main Scheme benefits, drawn at the same time as your Scheme benefits or deferred until the eve of your 75th birthday.

    How do I contribute to an AVC?

    If you wish to contribute to the in-house AVC Scheme you should contact Prudential. Prudential provide the in-house AVC scheme which is open to new members.

    Contacting Prudential – more information, including application forms and quotations are available directly from Prudential at The Retirement Specialist Team on 0800 032 6674. You may also wish to refer to Prudential’s website.


    Follow this link for information on Investment Performance of Prudential AVC's


     *Webpages will open in a new window.  NILGOSC is not responsible for content on external websites.