Saving a little extra while you’re working can make a big difference when you retire. If you’d like to, you can pay additional voluntary contributions (AVCs) which build up in an individual pot of savings that’s just for you. AVCs are saved on a defined contribution basis. 

When you retire, you can take your AVC fund alongside your Plan pension in the way that’s right for you to give your retirement income a boost, or you can put it towards your tax-free cash. 

How much retirement income your AVC savings will provide depends on two things:

• the amount you pay in while you’re working
• how well your investments perform over the years. 

We know times are tough right now, but it’s well worth saving as much as you can. Don’t forget that you don’t pay tax on the money you pay into the Plan. This is called tax relief and means your AVC contributions cost you less than you might think. If you’re a basic-rate taxpayer, every £1 you contribute to your AVCs only costs you 70p, as paying by SMART means you make savings on National Insurance too.