You can make additional pension savings to increase your pension benefits when you retire, there are two ways to do so. There are additional voluntary contributions (AVCs) and additional pension contributions (APCs).
If you are thinking of making additional pension contributions, you will need to make sure that you don’t go over the annual allowance tax limits. See page tax and pension benefits for more information.
Additional voluntary contributions (AVCs)
With AVCs you pay extra contributions into your fund’s AVC plan to save for a bigger pension or lump sum when you claim your pension.
AVCs are taken directly from your pay before your tax is worked out, so if you pay tax, you receive tax relief automatically. You can elect to pay a set percentage or a fixed monthly amount of your earnings.
You can increase or decrease the amount of AVCs you are paying as well as stop paying or restart at any point. The maximum contribution is 100% of your pensionable pay, less statutory National Insurance Contributions and your main scheme contributions.
Your AVC contributions will be invested with Clerical Medical where you will have your own personal account and you decide how the money in your pot is invested.
You can pay up to 100% of your pensionable pay into an in-house AVC
If you wish to commence paying AVC, please contact us by emailing pensions@gwynedd.llyw.cymru or complete the attached ‘AVC request form’.
Shared Cost AVCs
Your employer can also pay towards your AVC at their discretion. This is known as a Shared Cost AVC. Your employer may offer a Shared Cost AVC through a salary sacrifice arrangement. You do not pay tax or National Insurance contributions on the AVC Contributions paid through a salary sacrifice arrangement. Your employer also benefits because they pay lower national insurance contributions.
Check with your employer whether they offer a Shared Cost AVC scheme.
Additional Pension Contributions (APC)
You can buy extra pension by paying APCs regularly over a period of time, or by paying a one-off lump sum. The maximum amount of additional pension you can buy is £9,054 (this figure increases each year in line with the cost of living).
How much the APC costs you will depend on how much extra pension you want to buy, the age you start paying the extra contributions and the length of time you want to them over.
The purchase of extra pension is for yourself only; there is no option to purchase extra pension for your dependants.
You can find out how much you can increase your LPGS pension by paying APCs by visiting the online calculator which can be found on the LGPS member website