Features

AVC features include:

  • they allow you to pay extra money into a separate pension 'pot' alongside your LGPS benefits
  • you can save up to 100% of your taxable pay
  • contributions come out before tax, making this a tax‑efficient way to build extra retirement income - your contributions are still subject to HMRC limits and LGPS regulations

Although your employer does not automatically contribute to your AVC, you can ask whether they offer support or matching.

You can learn more from the Oxfordshire Pension Fund's AVC provider, Legal & General.

How AVCs work

Your AVC payments build a personal investment account with Legal & General. You choose the funds, and your account grows based on your contributions and investment returns.

Legal & General will:

  • manage and administer your account
  • provide fund information and risk ratings
  • notify you when any fund profiles change

When you retire, your AVC becomes a pot of money you can use in various ways. Note that options 4 and 5 are not available to every member. Your options will be explained to you when you retire.

1. Buy an annuity

Exchange your AVC fund for a guaranteed income for life.

You can buy one or several annuities from a pension provider when you take your LGPS pension.

2. Buy extra LGPS pension

Use your AVC to buy additional LGPS pension (available if you take immediate payment of your main LGPS benefits).

3. Take cash

You can usually take up to 100% of your AVC as a tax-free lump sum, as long as:

  • you take it at the same time as your main LGPS pension
  • it doesn't exceed 25% of your total LGPS benefits (including the AVC) or your available lifetime allowance

4. Buy extra membership (for older AVC contracts)

If your AVC began before 13 November 2001, you may be able to convert your fund into extra LGPS membership. This option adds pension at 1/60th of final pay per year purchased. Conditions apply.

5. Leave your AVC invested until later

For AVCs started before 2014 (with LGPS membership ending before April 2014), you can defer taking your AVC up to age 75.

If you defer, you can normally only take up to 25% of the pot tax‑free. Usually, you must use the remainder to buy an annuity.

Some members may also have a right to transfer the AVC to another arrangement. We can advise you.

Notes about your AVC

If you move money out of the 'with‑profits' fund, Legal & General may apply a market value reduction. Check the latest information with Legal & General.

Some pension freedoms do not apply to in‑house AVCs. Seek impartial guidance from Pension Wise if you're considering transferring your AVC to a different type of pension arrangement.