Are AVCs worth it?
AVC pensions are eligible for government tax relief on pension contributions, which gives a significant boost to everything you save into them. As a result, an AVC pension can be a particularly tax-efficient option for people with higher incomes, as it allows you to save more of your money to enjoy in later life.
What are AVC pension contributions?
An AVC pension is an 'additional voluntary contribution' pension that you can build alongside your workplace pension scheme. It can be a tax-efficient method of boosting your retirement savings as any additional voluntary contributions you make to your pension are deducted from your wages before tax.
Do you pay national insurance on AVC?
The main advantage of Shared Cost AVCs over a standard AVC option is that as well as receiving full Income Tax savings, you will not pay National Insurance Contributions (NICs) on the amount of pay that you have sacrificed.
Are AVC's salary sacrifice?
Salary Sacrifice Shared Cost AVCs
As a result it lowers your earnings which means you pay less income tax and National Insurance, subject to your personal circumstances. The pay you sacrifice is paid into your AVC pot by your employer.