North Ayrshire Council has recently launched a salary sacrifice Shared Cost Additional Voluntary Contribution (Shared Cost AVC) scheme to Local Government Pension Scheme (LGPS) members.
Shared Cost AVC’s are exclusively available to LGPS members, giving you the unique opportunity to save for retirement in a very cost-efficient way.
What are the key benefits of a Shared Cost AVC?
- Income Tax and National Insurance contribution savings on your Shared Cost AVC payments
- You can start your Shared Cost AVC from as little as £2 per month, all the way up to your maximum contribution amount (depending on your salary)
- There’s flexibility when it comes to increasing or decreasing your contribution amount if and when you need to
- You can access your Shared Cost AVC pot from age 55, meaning you could retire early or with more money*
- There’s an option to withdraw your Shared Cost AVC pot 100% tax free at retirement**
How does it work?
The contributions you make are separate to your LGPS contributions and are invested in your chosen fund(s). The fund(s) you select should hopefully grow overtime and will be available for you to access at retirement.
Your Shared Cost AVC pot can be taken as an additional pension of your choice, or subject to certain limits, a tax-free lump sum, or a combination of both. Any interest, income or capital gain earned on your Shared Cost AVC is free from Income Tax and National Insurance contributions.
A Shared Cost AVC must be operated on a ‘shared cost’ basis. This means if you join the scheme, it’s up to you to decide upon how much you wish to contribute – the funds are then deducted from your gross pay. This contribution will show on your payslip as two entries, a £1 contribution from you (SAVC EE), and the remaining amount you have sacrificed – the employer contribution (SAVC ER SS). For example, if you would like to pay £100 per month into a Shared Cost AVC, your total Shared Cost AVC amount will be £100 with £99 being the salary sacrifice amount and £1 being your personal contribution.
Thanks to the Income Tax and National Insurance contribution savings, a £100 contribution will only cost a basic rate taxpayer £66.88 in the 2022/23 tax year!
What is a salary sacrifice arrangement?
A salary sacrifice arrangement is between you and the Council where you formally agree to a reduction in your salary and in return you receive a benefit (in this case the benefit is contributions, paid by the Council, into your AVC fund).
How do I learn more about this new employee benefit?
AVC Wise have a team of experts who are here to support your Shared Cost AVC journey. The Council has its own dedicated Shared Cost AVC platform where you will be able to learn more about the scheme and make or amend your application.
For more information, please register on the AVC platform at www.avcwise.co.uk/register
If you’re registering for the first time, once you have filled in your details you will receive an email from AVC Wise to confirm your registration. Click the link in the email to confirm your account, and you will then be able to sign in.
This will give you access to the following resources:
- Live webinars
- Private, individual meetings
- Bitesize, educational videos
- Handy calculators
- Detailed FAQs and Terms & Conditions
How do I join the scheme?
To make an application, please register or sign into your account and select the ‘Click here to make your Shared Cost AVC application’ button on the home page.
‘The reason I joined the Shared Cost AVC scheme was to get tax relief and to potentially retire earlier and enjoy the precious few years of retirement together with my partner.’ – Quote from a Shared Cost AVC member
Contact details
Do you have a question about the scheme? If so, feel free to contact the AVC Wise team below:
Email: support@avcwise.co.uk
Phone: 01252 959 779
Live chat: www.avcwise.co.uk
*The value of an investment can go down as well as up.
**Dependent on the combined value of other LGPS benefits.