{"id":242,"date":"2018-07-12T08:45:21","date_gmt":"2018-07-12T08:45:21","guid":{"rendered":"http:\/\/pensions.cardiffcouncilwebteam.co.uk\/?page_id=242"},"modified":"2023-03-27T10:33:45","modified_gmt":"2023-03-27T10:33:45","slug":"how-to-increase-your-benefits","status":"publish","type":"page","link":"https:\/\/www.cardiffandvalepensionfund.org.uk\/members\/how-to-increase-your-benefits\/","title":{"rendered":"How to increase your benefits"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column width=&#8221;1\/1&#8243;][vc_column_text]<\/p>\n<h1>How to increase your pension benefits<\/h1>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row top_padding=&#8221;45&#8243; row_id=&#8221;siderow&#8221;][vc_column width=&#8221;2\/3&#8243;]<div class=\"video-embed  wpb_content_element\"><iframe loading=\"lazy\" title=\"Pensions made simple: 3. Looking after your pension\" src=\"https:\/\/player.vimeo.com\/video\/371919322?dnt=1&amp;app_id=122963\" width=\"1161\" height=\"653\" frameborder=\"0\" allow=\"autoplay; fullscreen; picture-in-picture; clipboard-write\"><\/iframe><\/div>[vc_column_text]<\/p>\n<h2>Increasing your benefits<\/h2>\n<p>As a member of the Local Government Pension Scheme (LGPS), you have the opportunity to make additional contributions to top up your retirement benefits.<\/p>\n<p>The LGPS offers two tax efficient ways of doing so:[\/vc_column_text][vc_tta_accordion section_title_tag=&#8221;h3&#8243; style=&#8221;flat&#8221; shape=&#8221;square&#8221; color=&#8221;white&#8221; spacing=&#8221;2&#8243; gap=&#8221;5&#8243; active_section=&#8221;125&#8243; css_animation=&#8221;fadeIn&#8221; no_fill=&#8221;true&#8221; collapsible_all=&#8221;true&#8221;][vc_tta_section title=&#8221;Additional Voluntary Contribution (AVC)&#8221; tab_id=&#8221;AVC&#8221;][vc_column_text]Additional Voluntary Contribution (AVCs) are a tax efficient way to save towards your retirement, as an active member of the LGPS.<\/p>\n<p>All AVC contributions are deducted from your salary before you pay Income Tax and National Insurance, which means you will get tax relief at the appropriate rate.\u00a0The AVC contributions paid are invested in a fund of your choice, with <a href=\"http:\/\/www.pru.co.uk\/lgbanner\" target=\"_blank\" rel=\"noopener noreferrer\">Prudential\u00a0<\/a><\/p>\n<p>You are able to contribute up to 100% of your monthly pay (once all statutory deductions have been made) to your AVC fund.\u00a0You can amend your AVC contribution level and investment fund choice as many times as you like.<\/p>\n<p>When you retire, you can take some or all of your AVC fund as a tax-free cash lump sum (subject to HMRC limits). You can find out other ways of using your AVC fund at the <a href=\"https:\/\/lgpsmember.org\/more\/AVCoptions.php\">LGPS website.<\/a><\/p>\n<h3>What if I started paying into an AVC on or before 31 March 2014?<\/h3>\n<p>Prior to 31 March 2014, your contribution level was limited to 50% of your monthly pay. However, you are now able to contribute up to 100% of your monthly pay (once all statutory deductions have been made) to your AVC fund from 14th May 2018.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=&#8221;Additional Pension Contribution (APC)&#8221; tab_id=&#8221;ARC&#8221;][vc_column_text]If you are an active member of the Local Government Pension Scheme (LGPS), you can purchase an additional amount of annual pension.\u00a0 The additional pension will be added to your &#8216;base pension&#8217; and paid every year for the whole of your retirement.\u00a0This is known as an Additional Pension Contributions (APCs) contract.<\/p>\n<p>The maximum amount of additional annual pension that can be purchased is \u00a37,579.\u00a0 However, you will need to provide a medical report from your doctor to confirm you are currently in good health &#8211; if your doctor charges for this service, you will need to cover this cost.<\/p>\n<h3>How will the additional contributions be collected?<\/h3>\n<p>The extra pension contributions are deducted from your salary each month. You can select the length of your contract, but it must be in &#8216;complete years&#8217; and the contract must end before your Normal Pension Age (NPA). You also have the option to pay for the additional pension as a &#8216;one off lump sum&#8217;.<\/p>\n<p>You can stop your APC contributions part way through the contract.\u00a0However, you will only be credited with the proportion of extra pension that you have paid for.<\/p>\n<h3>How do I calculate an estimate of the cost involved?<\/h3>\n<p>The cost of purchasing the additional pension is based on your age, gender and how you pay, for example as a lump sum or by instalments &#8211; find out the <a href=\"https:\/\/www.lgpsmember.org\/more\/apc\/index.php\" target=\"_blank\" rel=\"noopener noreferrer\">estimated cost of purchasing additional pension <i class=\"fa fa-external-link\"><\/i><\/a>.[\/vc_column_text][\/vc_tta_section][\/vc_tta_accordion][vc_column_text]You could also increase your pension benefits with a Personal Pension, Stakeholder pension plan or a Free Standing Additional Voluntary Contribution arrangement (FSAVC) &#8211; these are available via private companies.<\/p>\n<h2>Are there any limits on extra contributions?<\/h2>\n<p>HM Revenue &amp; Customs (HMRC) rules allow you to pay as much as 100% of your earnings with full tax relief to provide pension benefits within prescribed limits. Your normal LGPS contributions are between 5.5% and 12.5%, so this leaves a large proportion of your taxable earnings available to invest in additional contributions.<\/p>\n<p>However, HMRC&#8217;s Annual Allowance limit, tells us the maximum your pension benefits can increase in each tax year.\u00a0The limit is currently at \u00a340,000.<\/p>\n<p>We cannot provide you with any financial advice in relation to these options, however, you can seek independent financial advice to help you &#8211; visit <a title=\"Visit the unbiased website\" href=\"https:\/\/www.unbiased.co.uk\/\" target=\"_blank\" rel=\"noopener noreferrer\">unbiased <i class=\"fa fa-external-link\"><\/i><\/a>.[\/vc_column_text][\/vc_column][vc_column el_class=&#8221;siderow&#8221; width=&#8221;1\/3&#8243;][vc_column_text el_class=&#8221;boxblue&#8221;]<\/p>\n<h3>HMRC<\/h3>\n<p>If you have any questions relating to your personal tax or National Insurance in relation to your pension you can find information here.<\/p>\n<p><a href=\"https:\/\/www.gov.uk\/topic\/personal-tax\" target=\"_blank\" rel=\"noopener noreferrer\">HMRC <i class=\"fa fa-external-link\"><\/i><\/a><\/p>\n<p>[\/vc_column_text][vc_column_text el_class=&#8221;boxblue&#8221;]<\/p>\n<h3>Pension Advisory Service<\/h3>\n<p>Government service offering free, impartial guidance about pensions.<\/p>\n<p>What&#8217;s available?<\/p>\n<p>Online information and tools, online chat, telephone helpline, personal appointments.<\/p>\n<p><a href=\"https:\/\/www.pensionsadvisoryservice.org.uk\/\" target=\"_blank\" rel=\"noopener noreferrer\">Pension Advisory Service <i class=\"fa fa-external-link\"><\/i><\/a>[\/vc_column_text][vc_column_text el_class=&#8221;boxred&#8221;]<\/p>\n<h3>Need an Independent Financial Advisor?<\/h3>\n<p>Contact <a href=\"https:\/\/www.unbiased.co.uk\/\" target=\"_blank\" rel=\"noopener noreferrer\">Unbiased <i class=\"fa fa-external-link\" aria-hidden=\"true\"><\/i><\/a>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column width=&#8221;1\/1&#8243;][vc_column_text] How to increase your pension benefits [\/vc_column_text][\/vc_column][\/vc_row][vc_row top_padding=&#8221;45&#8243; row_id=&#8221;siderow&#8221;][vc_column width=&#8221;2\/3&#8243;][vc_column_text] Increasing your benefits As a member of the Local Government Pension Scheme (LGPS), you have the opportunity to make additional contributions to top up your retirement benefits. The LGPS offers two tax efficient ways of doing so:[\/vc_column_text][vc_tta_accordion section_title_tag=&#8221;h3&#8243; style=&#8221;flat&#8221; shape=&#8221;square&#8221; color=&#8221;white&#8221; spacing=&#8221;2&#8243; gap=&#8221;5&#8243; active_section=&#8221;125&#8243; css_animation=&#8221;fadeIn&#8221; no_fill=&#8221;true&#8221; collapsible_all=&#8221;true&#8221;][vc_tta_section title=&#8221;Additional Voluntary Contribution (AVC)&#8221; tab_id=&#8221;AVC&#8221;][vc_column_text]Additional Voluntary Contribution (AVCs) are a tax efficient way to save towards your retirement, as an active member of the LGPS. All AVC contributions are deducted from your salary before you pay Income Tax and National Insurance, which means you will get tax relief at the appropriate rate.\u00a0The AVC contributions paid are invested in a fund of your choice, with Prudential\u00a0 You are able to contribute up to 100% of your monthly pay (once all statutory deductions have been made) to your AVC fund.\u00a0You can amend your AVC contribution level and investment fund choice as many times as you like. When you retire, you can take some or all of your AVC fund as a tax-free cash lump sum (subject to HMRC limits). You can find out other ways of using your AVC fund at the LGPS [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":131,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to increase your benefits - Cardiff and Vale Pension Fund<\/title>\n<meta name=\"description\" content=\"As a member of the Local Government Pension Scheme (LGPS), you have the opportunity to make additional contributions to top up your retirement benefits.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.cardiffandvalepensionfund.org.uk\/members\/how-to-increase-your-benefits\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to increase your benefits - 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