AVC

When planning for retirement in Ireland, Additional Voluntary Contributions (AVCs) are a great way to enhance your pension. Here’s a quick guide on how AVCs work and why they might be right for you.

What are AVCs?

AVCs are extra contributions you can make to your pension, beyond what your employer contributes. They are available to members of occupational or public sector pension schemes and allow you to increase your retirement savings.

Benefits of AVCs

1. Tax Relief: You can get tax relief on your contributions at your marginal rate (20% or 40%), making AVCs a tax-efficient way to save for retirement.
2. Flexibility: You can make regular or lump-sum contributions based on your financial situation.
3. Bridge Pension Gaps: AVCs help fill gaps in your pension if you’ve had lower earnings or career breaks.
4. Tax-Free Lump Sum: Up to 25% of your AVCs can be taken as a tax-free lump sum at retirement.

Considerations