The more you put into pensions, the better off you’ll be when you retire. You can put more in in several ways:
- by arranging to purchase additional LGPS pension by making additional regular contributions, ARCs.
- by making additional voluntary contributions, AVCs.
- by contributing to a personal pension plan or stakeholder pension scheme.
Contributing to pensions does mean that you are putting money by specifically for your retirement, as it cannot be refunded if you change your mind.
Additional pension /ARCs
You can arrange to purchase additional pension in the Local Government Pension Scheme (LGPS). If you want to find out the cost of this, our ARC (additional regular contribution) calculator is the place to start.
Additional voluntary contributions (AVCs)
You can choose to pay additional voluntary contributions that are invested outside the LGPS so you have your own pension fund building up over time.
Every year we remind members of the availability of AVCs in their benefit statement, for example the AVC insert to 2011 benefit statements .
Further details of the Prudential's AVCs are also available on their website.
Contributing to another pension
You can choose to pay into a personal pension plan or stakeholder pension scheme as well as the LGPS.
Whoever you buy your other pension from will invest your money, and when you retire your investments are cashed in to buy you an annuity (annual payment).
What you get out of a personal pension plan or stakeholder pension relies on how much you put in and how well your investments perform over time - there’s no guarantee or link to your earnings.
Added years
Arranging to purchase additional years membership was only possible if you elected to do so before 31 March 2009. It means the total membership used to calculate your pension is increased.
If you stop paying additional contributions, or leave before buying them all, your total membership will only be increased by the number of years you’ve paid for by then. However, if you retire due to ill health or die in service, the full number of additional years will be added to your total membership.
Financial advice
The choices for extra payments into your pension can be confusing and different people may benefit from different options. If you’re thinking of making extra payments, it may be worth taking financial advice.
For example, if you want to take your AVC fund as extra tax free cash at retirement, you will reduce the amount of LGPS pension that you can give up for cash.
More information
A Guide to the LGPS has full details on increasing your pension. If you would rather receive a copy by post, contact us.