AVCs - Additional Voluntary Contributions

What are Additional Voluntary Contributions (AVCs)?

Additional Voluntary Contributions (AVCs) are a tax efficient means to top-up your current pension fund by making extra contributions. As people are now living longer and longer, a larger pension fund than ever before is required to ensure you can enjoy the comforts in retirement that you have become used to whilst working.

To gain real security and peace of mind about the financial future, many people top up their current pension fund by making extra contributions, known as AVCs. With full tax relief available at your highest tax rate, and PRSI relief, AVCs are an extremely cost effective way to improve your financial status in retirement. You can make regular contributions, say monthly, or you can pay a lump sum on a once-off basis.

What are the main benefits of AVCs?

- Larger fund at retirement
Obviously the most important reason for making AVCs is that you have an increased fund to purchase a larger pension at retirement. It is important to bear in mind that as people are living longer, healthier lives and retiring earlier, you may well have one-third of your life ahead of you when you retire. By making AVCs, you are ensuring that you have an adequate fund built up to make the most of those years. There are a number of options available to you with regard to the use of your increased fund at retirement. We will advise you on these upon contact.

- Tax Savings
If you put €100 into your pension and you are on the 41% rate of tax, you could get tax & PRSI relief (currently 6%) totalling €47*.

So the €100 investment only costs you €53 from your after tax pay packet. Compare this with any other kind of saving. If you save €100 in your bank account it costs you the full €100 from your after tax pay packet. That’s nearly twice as much! If you are on a lower tax rate, relief is also available at the lower rate.

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PRSAs | Group Pension Schemes | Additional Voluntary Contributions (AVC) | Personal Retirement Bonds | ARFs and AMRFs