What are AVCs?

The BTPS Additional Voluntary Contribution (AVC) facility is a tax efficient way to improve your retirement savings. You can pay extra contributions into the BTPS which are invested within a fund and which, adjusted for investment returns, are applied at retirement to provide additional pension and/or tax-free lump sum benefits. More information can be found in the AVC Guide, which can be downloaded from Useful documents.

If you pay AVCs into the BTPS you benefit from:

• tax relief on your contributions (within HMRC limits);

• funds accumulate free of income tax and capital gains tax; and

• 25% of your overall BTPS benefits, including AVCs, may be taken as a tax-free lump sum (capped at 25% of the Lifetime Allowance).

You should be aware that there are also other ways to increase your retirement savings:

• If you are a Section A or a Section B member you may increase your retirement benefits by buying Added Years of Pensionable Service. A separate booklet on Added Years is available on the BT Intranet (Added Years is not available to Section C members).

• Free Standing AVC Schemes, Personal Pension Plans and Self Invested Personal Pension Plans are all registered pension schemes which benefit from the same tax concessions as  BTPS and AVCs. They are offered by insurance companies and similar organisations. If you wish to contribute to one of these, you must make your own arrangements with the provider of those schemes.

• There are other types of investments you can consider to boost your retirement savings, but these are outside the scope of this booklet.

It is for you to decide which the best savings method is for you. As for any savings it is recommended that you seek independent financial advice. A financial adviser may charge you a fee for advice.