LGPS Employee FAQs
AVC Wise doesn't charge anything to the LGPS member. The only costs to you will be your chosen contribution amounts, and any fees charged by your investment provider dependant on the fund you choose.
No, you cannot pay a lump sum into your pot at the same time as paying Shared Cost AVCs. However, the Shared Cost AVC scheme has the flexibility to increase and decrease your contribution amounts month by month.
Yes, it will alter as the student loan repayments are calculated on the salary on which you are liable to pay National Insurance contributions (NICs). Under a Shared Cost AVC scheme your total salary on which NICs is paid will reduce, hence your loan repayments will decrease.
In the event of death, the value of your Shared Cost AVC pot will be paid as a lump sum to whoever the managers of your scheme advise should receive this. This will normally be paid to your spouse, civil partner, co-habiting partner, other dependant or legal representative.
Yes, Shared Cost AVC amounts are completely flexible and can be seamlessly changed each payroll via your employer's Shared Cost AVC platform.
As with any investment, there are the usual risks that fund values can fluctuate and can go down as well as up. However, it's worth remembering the value you're receiving on the way IN to your Shared Cost AVC pot. A £100 only costs a basic rate taxpayer £72.08! That’s an immediate value increase of 38.7% before the money is even invested.*
*Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from taxation, are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. A pension is a long term investment, the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
The current age you can access your Shared Cost AVC pot is 55 years old.
Yes, participating in the Shared Cost AVCs could mean you fall into a lower tax bracket dependent on your own personal circumstances. You can contact us to learn more here.
Yes, the maximum amount you can contribute will depend on how much you get paid. Your employer will review your application and accept or reject your Shared Cost AVC depending on a number of factors including how much you get paid, how much other salary sacrifice arrangements you have, National Minimum Wage/National Living Wage requirements, and more. To work out your maximum contribution amount, you can use the calculator on your employer's Shared Cost AVC platform, or book an Individual Meeting with us at www.avcwise.co.uk/meeting
As long as you continue to be paid above the National Insurance threshold, after the salary sacrifice, this will count as a qualifying year on your National Insurance record for State Pension benefits.
Your original salary will continue to be shown on your payslip and therefore should not affect applications for loans and mortgages. However, this will depend on the mortgage provider. It is important to note that different lenders take their own approach and some may choose to base the affordability criteria on your reduced salary.
It's never too late (or too early!) to start paying Shared Cost AVCs. The Income Tax and National Insurance contribution relief you receive on your contributions means this is always one of the most cost efficient ways to save your retirement. If you're closer to retirement, it's never been more important to think about Shared Cost AVCs.
You can book an individual meeting with us by visiting www.avcwise.co.uk/meeting.
Your Shared Cost AVC is linked to your active LGPS membership. If you flexibly retire you can access your Shared Cost AVC pot. When you 're-join' the LGPS you can start another Shared Cost AVC plan, although it is worth booking an IM to discuss your contribution limits in this case.
You can contribute right up to the point you flexibly retire. Your pot would then be available to access when you flexibly retire. When you re-join the LGPS you can start another SCAVC plan, although it could worth booking an IM to discuss your contribution limits in this case - click here to do so www.avcwise.co.uk/meeting.
Yes, to do this, you would need to inform your Pension Fund and AVC provider.
Your Local Government AVC allows you to take all or part of your AVC plan as a tax free cash lump sum, subject to certain conditions.
You save Income Tax and National Insurance contributions at the rate you pay them. For a higher rate taxpayer in England and Wales, a £100 contribution will only cost £58.02*.
No, you cannot backdate contributions as the money going into your Shared Cost AVC pot is provided under a salary sacrifice arrangement. Therefore, you can only participate and pay Shared Cost AVCs from future salary… don't hang around, make your application today to make the most of each remaining payday!
Everyone's circumstances are different and the maximum amount you can contribute will depend on how much you get paid. Your employer will review your application and accept or reject your Shared Cost AVC depending on a number of factors including how much you get paid, how much other salary sacrifice arrangements you have, National Minimum Wage/National Living Wage requirements, and more. To work out your maximum contribution amount, you can use the calculator on your employer's Shared Cost AVC platform, or book an Individual Meeting with us at www.avcwise.co.uk/meeting.
If your employment terminates for whatever reason, your entitlement to participate in the Shared Cost AVC scheme will cease immediately and all contributions will cease. In this event, your Shared Cost AVC pot will remain invested and will be available to provide you with additional benefits on retirement.
*Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from taxation, are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. A pension is a long term investment, the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
*Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from taxation, are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. A pension is a long term investment, the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
LGPS Employer FAQs
AVC Wise is a fully managed platform solution offered to employers that have employees who are members of the Local Government Pension Scheme (LGPS). It facilitates the initial on-boarding and transition from standard Additional Voluntary Contributions (AVCs) to salary sacrifice Shared Cost Additional Voluntary Contributions (Shared Cost AVCs) and provides ongoing management of the scheme.
The AVC Wise team provides tax, salary sacrifice and LGPS experts, as well as a customer service team, technical, marketing and account management support.
A Shared Cost AVC can be set up in addition to standard AVC offering but can be deemed a much more effective way for a member to save; whilst saving you money.
The fully managed solution minimises the work for you and your teams. The transition and onboarding is straightforward and you are guided through each step by a dedicated Implementation Manager. The on-going management and administration of the Shared Cost Additional Voluntary Contribution scheme is managed through a dedicated AVC Wise Account Manager. The fully managed solution also reduces the administration burden on your teams, working closely with your HR, payroll and communications departments.
A small proportion of your employees are likely to be impacted by the annual allowance and a large number not impacted. We can offer individual meetings to put your employees in an informed position as to whether they wish to utilise the scheme
A lack of take up could be partially due to lack of awareness, as AVC providers, such as Prudential and Standard Life, have not actively communicated the AVC facility to members since circa 2018.
No, members have full access to the platform so they can amend or cancel their plan at any time.
Local Government organisations can procure our fully managed solution via Portsmouth City Council's salary sacrifice Additional Voluntary Contributions framework. This framework enables UK Local Government and wider public sector customers to seamlessly enter into a contract with AVC Wise Ltd to provide a salary sacrifice Additional Voluntary Contributions (SSAVC) service (including Shared Cost Additional Voluntary Contributions) and other associated products and services.
Save your organisation time: we have already undertaken a procurement compliant with procurement regulations.
Assured supplier standards: suppliers on this agreement are pre-qualified which means they meet the appropriate mandatory and discretionary criteria as set out in the standard supplier selection questionnaire.
Save on resource needs: quality and price have already been assessed with pre-agreed terms & conditions to support all orders.You can find directions on how to access the framework by visiting: https://www.portsmouth.gov.uk/services/business/procurement/salary-sacrifice-additional-voluntary-contributions-framework/
Downloadable versions of our FAQs.
Employee FAQs Word document (18kb)
