What is an FSAVC?

FSAVC stands for Free-Standing Added Voluntary Contributions – a way some members of Occupational Pension Schemes to voluntarily contribute more to their pension benefits if they choose.

By becoming a member of an FSAVC scheme, a pension saver may be able to build extra pension benefits for themselves in retirement on top of their occupational pension, such as receiving larger pension payments upon retirement.

What is the difference between AVCs and FSAVCs?

At first glance, FSAVCs and AVCs sound similar—they both allow you to top up your pension. But the key difference is where your money goes:

• AVCs (Added Voluntary Contributions) are linked to your workplace pension scheme. Your extra payments go into the same pot, often giving you benefits like lower fees or employer contributions.
• FSAVCs (Free-Standing AVCs) are completely separate from your workplace pension and were offered by insurance companies instead. They work like a personal pension, where the final amount depends on how much you’ve paid in and how well your investments perform.

Since pension rules changed in 2006, FSAVCs have become less common, with more people opting for personal or workplace-based alternatives.

Are there any FSAVC pension rules?

FSAVCs are still regulated financial products, and there are some important rules to keep in mind:

• You can usually access your FSAVC from age 55.
• Up to 25% of your FSAVC can be taken as a tax-free lump sum.
• FSAVCs qualify for tax relief, meaning the government tops up your contributions.

If you’re thinking about making changes to your FSAVC, always seek advice from a qualified financial adviser.

Are there any FSAVC pension rules?

FSAVCs are still regulated financial products, and there are some important rules to keep in mind:

• You can usually access your FSAVC from age 55.
• Up to 25% of your FSAVC can be taken as a tax-free lump sum.
• FSAVCs qualify for tax relief, meaning the government tops up your contributions.

If you’re thinking about making changes to your FSAVC, always seek advice from a qualified financial adviser.

FSAVC FAQs

Here are some of the most common questions we are asked about FSAVCs – if you can’t find what you need, give us a call and we’ll be happy to help.

Can I transfer a FSAVC to a company pension?

Possibly – but it depends on a few things like the rules of your FSAVC provider and the pension scheme you want to transfer into. Some workplace pensions allow FSAVC transfers, while others don’t. Because every case is different, it’s best to get professional advice before making a move.

Can you transfer an FSAVC to a personal pension?

In many cases, yes, you can transfer an FSAVC to a personal pension. Since they’re similar, you may be able to transfer them to another provider. However, whether this is a good idea depends on fees, investment options, and the potential benefits you could lose or gain. Again, getting expert guidance is really important.

What happens to an FSAVC if you die?

FSAVCs, like most personal pensions, usually allow you to name a beneficiary – someone who will receive the remaining pension if you pass away before accessing it. If you haven’t already done this, check with your provider to make sure your pension goes to the right person.

Should you do anything about your FSAVC?

If you have an FSAVC, it’s a good idea to take a look at your options; pension rules have changed, and you might find better alternatives. Whether you’re thinking about transferring, accessing your funds, or just want to understand what’s best for you, speaking to a regulated financial adviser can help you make the right decision.