Additional Voluntary Contributions

Ozone

I work for a local authority and have considered additional voluntary contributions, (AVC's), to help increase my pension. I have been given a booklet which forecasts how much I will get out given my age and the amount, (based on a percentage of my salary and current maximum allowable yearly contributions), I will have to pay in to get the benefit, which is measured in years of service. I have calculated that five years extra service will give me an extra amount of pension each year of approx £1,800. There will also be an increase in a lump sum payment that I will get. To get these 'extra benefits' I need to pay in, between now and aged 65, over £26,000 which includes an allowance for tax relief on pension payments. It now does not seem the clearcut desicion it first appeared. I could save the same amount of money in an mini cash ISA for example and could be better off. A lot depends on whether I survive to 65 and if so how far past 65 I get! Has anyone else had any experience in this field or know anything about it? Any pointers or advice would be helpful. I dont know if I should seek a independent financial advisor and the type of person/organisation this should be?
Any help appreciated.

dunstonh

A cash ISA is highly unlikely to come close to the benefits of added years on a like for like net cost.

You need to remember that you are buying extra years which will be calculated against against your pensionable salary. A salary which goes up over time and the pension income in retirement which also goes up annually.

Ozone

Thank you.