What is the meaning of the medical abbreviation avc?

You can build an additional voluntary contribution pension with your workplace pension scheme.Voluntary contributions to your pension can be deductible from your wages in order to boost your retirement savings.If you put off saving for retirement until later life or have disposable income that you would like to save more efficiently, the AVC pensions are useful.

Depending on the company you work for, your employer or board of trustees may offer a AVC pension.It depends on the type of workplace pension you have.

You can join a defined contribution scheme if you have a Defined Contribution pension.The value of your pension will be based on how much money you pay in and how your investments perform over time.

If you have a defined benefit pension, you can save any extra contributions into it.Defined benefit pensions pay a retirement income based on your salary and the number of years you have worked for your employer, which is different to defined contribution AVC schemes.

The money you pay into a defined benefit AVC will be used to buy more time in your employer's pension scheme.This can be used to increase your pension benefits.

If your current employer offers AVCs, they can be a flexible way of topping up your retirement savings as they allow you to make either regular or lump sum payments at any time.Should you change jobs, you can transfer your AVC to a new employer as long as they have a compatible scheme.

If you don't exceed the pension contribution limit, you can pay as little or as much as you want into your pension.The limit is set at 100% of your income, with a cap of £40,000.

The government gives tax relief to AVC pensions.The standard amount of tax relief is a 25% tax top up for basic rate taxpayers, meaning that if you put £100 into your pension pot, HMRC will add another £25.

It is possible to cash in an AVC pension at the age of 55, no matter if you are still working or not.Depending on the rules of the scheme, you can either keep your money invested via drawdown or purchase an annuity if you choose to cash in an AVC at 55.After the first 25% tax-free amount, income tax will be charged at your highest rate.The age limit for access to your pension will be raised from 55 to 57 in 2028.

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