If you paid AVCs
AVCs explained
AVCs are a tax-efficient way to give your retirement savings a boost and you may have paid these when you were contributing to the Scheme.
AVCs work in a slightly different way to Scheme contributions as they're paid into a separate AVC account with an AVC provider. They're then invested until you retire and the value of your AVC account fluctuates with investment performance. The Company did not make contributions into your AVC account.
Using your AVCs when you retire
Your AVC benefits are paid at the same time as your main Scheme benefits. How you use your AVC account is up to you and will depend on how much you've saved and how you plan to use other pension arrangements, including your Scheme Retirement Account.
When you retire, you can choose how you'd like to use your AVC benefits. Your options are:
You can use your AVC account as part of your tax-free cash lump sum entitlement, as far as tax rules permit.
In broad terms, this means that the tax-free cash lump sum should not exceed 25% of the value of the overall benefits.
Any remaining AVC funds not taken as a cash lump sum on retirement would be used to purchase a lifetime annuity.
This is a product which, when purchased, can provide an income for life.