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:
- Additional Voluntary Contributions (AVC)
- Additional Pension Contributions (APC)
You may also wish to consider private arrangements that sit outside of the scheme; such as a Personal or Stakeholder pension plan or a Free Standing Additional Voluntary Contribution arrangement (FSAVC).
It should also be noted that extra contributions can be made to increase the level of death benefits payable, if you were to die in service.
Are there any limits on extra contributions?
HM Revenue & Customs (HMRC) rules allow you to pay up as much as 100% of your earnings with full tax relief to provide benefits within prescribed limits. As your normal LGPS contribution will lie between 5.5% and 12.5% this leaves a significant proportion of your taxable earnings to invest in additional contributions.
However, you should also be mindful of HMRC's Annual Allowance limit, which sets out the amount that your pension benefits can increase in any given year i.e. from 1 April to 31 March. This limit is currently set at £60,000. To find out more, please contact the Dyfed Pension Fund.
The Dyfed Pension Fund is unable to provide you with any financial advice in relation to these options. You may therefore wish to consider seeking Independent Financial Advice on this matter.