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.

Log-in as an existing print or digital subscriber

Forgotten your subscriber ID?


To access this content and the full TES archive, subscribe now.

View subscriber offers


Get TES online and delivered to your door – for less than the price of a coffee

Save 33% off the cover price with this great subscription offer. Every copy delivered to your door by first-class post, plus full access to TES online and the TES app for just £1.90 per week.
Subscribers also enjoy a range of fantastic offers and benefits worth over £270:

  • Discounts off TES Institute courses
  • Access over 200,000 articles in the TES online archive
  • Free Tastecard membership worth £79.99
  • Discounts with Zipcar,, Virgin Wines and other partners
Order your low-cost subscription today