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What Is An FSAVC?

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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.

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What Is The Difference Between AVCs And FSAVCs?

FSAVCs differ from AVCs because they are NOT connected directly to a workplace pension. Instead, FSAVCs were offered by insurance companies. They are defined contribution schemes (pay out relating to what is paid in and how well the funds perform).

AVC schemes are also defined contribution schemes, but are connected to an occupational scheme, allowing members to buy additional months or even years of membership from the main defined benefit pension scheme, increasing the pensionable benefits.

What Are The FSAVC Pension Rules?

FSAVC’s are still a regulated financial product, and of course come with a set of rules. We’ve listed a few of the ones that stand-out here, but you should always make sure you consult with a qualified and regulated financial adviser when considering taking action over pensions.

The rules changed in 2006, making FSAVCs a less popular choice in comparison to an alternative personal pension or stakeholder pension.

  • You may be able to access your FSAVC from 55.
  • You may be able to receive up to 25% as a tax-free lump sum.
  • FSAVCs qualify for tax-relief*

FSAVC FAQs

Can I Transfer A FSAVC To A Company Pension?

Answering questions like this is why good financial advice is really important. ALWAYS seek independent advice from a regulated adviser before making changes to your pension arrangements.

In short, it may be possible to transfer an FSAVC to a company pension, but it will depend on a number of factors determined by the FSAVC provider, the desintation scheme and the pension holder, making getting the right advice and doing your research all the more important.

Can You Transfer An FSAVC To A Personal Pension?

Broadly speaking, an FSAVC IS a personal pension – something of a personal add-on to an occupational pension. Again, transfers between FSAVC providers and other personal pensions may or may not be possible depending on the circumstances.

What Happens To An AVC If You Die?

As with most personal pensions, holders of FSAVCs should have designated a beneficiary in the event of death before pensionable age. Check with your FSAVC provider to ensure this has been done in your case.

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