10:01 22 March 2013
More and more people are now growing concerned with their retirement. With the gloomy economyand with jobs cuts, more and more people can’t help but wonder if they’ll be able to retire on time - and if they’ll be able to have a comfortable retirement.
One of the things you can do to ensure that you’ll have a good, or even a better life, when you hit retirement is by considering Additional Voluntary Contributions or AVCs. These are top-up pensions that allow you to save more money through your company pension scheme.
If you’re in a company pension scheme, you are allowed to save up to 15per cent of your earnings into a pension pot. If currently you’re only putting 5per cent into your pension scheme, you can maximize your allowance and put the extra 10per cent into AVCs.
Just like with your main pension contribution, you also get tax relief on the money that you save on your AVC.
However, keep in mind that AVCs are money-purchase schemes. This means that their final value will depend on the performance of the funds where the money is invested over the terms between investment and maturity.
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