Limits to revenue

28th June 1996 at 01:00
The facts about Additional Voluntary Contributions

* You can put up to 9 per cent of your annual earnings into AVCs with full tax relief.

* You can use your contributions to top up your pension to the maximum the Inland Revenue allows - particularly useful for those who entered teaching late or who have taken a career break to bring up children.

* You can also use your contributions to increase the lump sum your dependants will receive if you die, up to four times your earnings, and your widow's or widower's pension up to two-thirds of your own.

* In-house AVCs, like the Prudential scheme for teachers, are generally far better value than "free-standing" AVCs which allow you to select your own AVC provider. While the Prudential AVC scheme makes low charges - 1 per cent for the with-profits fund - "free-standing" AVCs could cost you 20 per cent of your investment in expenses and commission.

* Make sure you don't overfund your pension. There are Inland Revenue limits on the pension you may receive at retirement. Generally, the maximum benefits allowed are equivalent to what you would receive from the Teachers' Superannuation Scheme at the age of 60 after 40 years' service.

Subscribe to get access to the content on this page.

If you are already a Tes/ Tes Scotland subscriber please log in with your username or email address to get full access to our back issues, CPD library and membership plus page.

Not a subscriber? Find out more about our subscription offers.
Subscribe now
Existing subscriber?
Enter subscription number

Comments

The guide by your side – ensuring you are always up to date with the latest in education.

Get Tes magazine online and delivered to your door. Stay up to date with the latest research, teacher innovation and insight, plus classroom tips and techniques with a Tes magazine subscription.
With a Tes magazine subscription you get exclusive access to our CPD library. Including our New Teachers’ special for NQTS, Ed Tech, How to Get a Job, Trip Planner, Ed Biz Special and all Tes back issues.

Subscribe now