Glossary: Free-standing additional voluntary contributions
Similar to additional voluntary contributions (AVC), but independent (hence “free standing”) of any employer and sits alongside (and outside) any occupational pension scheme(s) you may be a member of, as well as any existing AVCs you may have with previous employers. As with AVCs, you get tax relief on contributions but you can only start one FSAVC in any one tax year.
Additional voluntary contributions
If you’re a member of an occupational pension scheme but want to increase your contributions to help boost your income in retirement, this is where AVCs come in. An AVC is a top-up pension that sits alongside your company pension and is administered by your employer. You get tax relief on your contributions and, if you move jobs, you can apply to transfer your AVC plan to your new employer or your AVC your contributions have to stop with your old employer and you will need to start a new AVC plan with your new employer. An AVC linked to a company scheme is subject to the rules of the main pension. (See Free-standing additional voluntary contribution).