Be smart and secure a brighter future with AVCs

Apr 28, 2021
A guide to saving more for your pension with AVCs

Nobody likes to imagine getting older, so many of us choose to ignore our pensions.  It’s nothing new, but it’s unwise. A recent study* has found two-thirds of adults retiring in 2021 in the UK won’t have enough in their pension to fund their post-work life. Many people are now facing a difficult retirement. Read on and make sure it won’t be you!

Could you save more for your retirement?

Should you (and could you) be saving more for your life after work?

If you’re an active member of BTP you can find the answer by logging on (or registering) on this website and using our pension planner. The planner will show you how much your annual income is likely to be when you retire. As a rough guideline, current research shows that an individual will need between £10,200 (basic) to £33,000 (comfortable) per year when they finish work.

Some lucky people in lockdown have managed to save money by not commuting to work, no pub or restaurant trips, no foreign holidays and less petrol costs.

And with the UK economy starting to recover from the pandemic, others may even be in line for a pay rise.

Even if you’re not one of the fortunate few, some are viewing the easing of lockdown as a time to reassess their priorities and start new regimes – like trying to save more. Even if it’s just a few pounds a week.

So perhaps now’s the time to put a little extra into your pension savings via Additional Voluntary Contributions or AVCs? 

Additional Voluntary Contributions

Additional Voluntary Contributions are flexible extra pension savings you can make from your pay (before tax is taken) on top of the normal contributions you make to your pension.

  • One of the perks of AVCs, is that you don’t need to save a set amount every month. If you’ve got an expensive time coming up, you can reduce your contributions, or equally you can add more in if you have some to spare.
  • AVCs are a great way to save extra money for retirement if you get large payments which don’t qualify for your pension (such as overtime and bonus payments).
  • You’ll also get government tax relief on anything you put in (up to your annual allowance - currently 100% of your annual earnings, or £40,000, whichever is lower). 

AVCs for BTP members

BRASS is the main AVC arrangement for 1970 Section members of the Fund.

AVC Extra is the main AVC arrangement for 2007 and CARE Sections of the Fund.

If you’re a 1970 Section member who already pays the maximum amount into BRASS you can apply to join AVC Extra if you wish to pay more.

You can see more information and find out how to join BRASS and AVC Extra on your BTP website here and in the resources section of this website under Read as you Need guides.