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Cost of delay

Don’t let retirement be a time for regrets

You may think retirement seems a long way off. But it’s surprising how quickly it comes around. That’s why planning for your perfect retirement is worth thinking about now. Like anything, the more thought you put into it in advance, the more likely it will turn out as you want. You don’t want to look back when you’re retired and wish you’d done more. By then it may be too late.

If you are already saving into your teachers’ pension scheme, then retirement is on your radar, and you’ve started planning towards it. Great. But are you making the most of it while you can?

To achieve the lifestyle you’d like in retirement, you might need to save more than you think towards it. Especially when you take into account the effects of inflation, the fact we’re all living longer and likely to spend more time in retirement and any State Pension changes. It can all affect how much it’s necessary to save to enjoy the retirement you’d like.

Tax efficient saving

It’s easy to save more towards the retirement lifestyle you have in mind. Teachers’ Additional Voluntary Contributions (Teachers’ AVCs) offer you a tax efficient way to save for your retirement in addition to your teachers’ pension scheme. They run alongside your teachers’ pension scheme, and contributions are taken from your pay. Teachers’ AVCs attract tax relief, up to annual limits, which means the money you’d normally pay in tax, is paid into your Teachers’ AVC as tax relief instead. For every £100 you contribute, the cost to you will only be £80 (if you’re a basic rate taxpayer). If you’re a higher or additional rate taxpayer, the cost to you will be even less. The more you save, the more tax relief you benefit from and the more your Teachers’ AVC pot receives a boost.

Not surprisingly, the more you pay, the bigger pot you could build up, giving it a greater chance to potentially grow.

As with any investment, it’s important to remember that the value of your Teachers’ AVC can go down as well as up and you may not get back the amount you put in. The tax you pay depends on your individual circumstances. HM Revenue & Customs tax rules may change in the future.

Find out more

To find out more about Teachers’ AVCs, visit www.pru.co.uk/ teachersavc. You’ll find worked examples and handy tools and videos to help illustrate how a Teachers’ AVC could help you and how much you could achieve. Alternatively call our Retirement Specialist Team on 0800 151 3637. Lines are open Monday to Friday, 9am to 6pm. They can’t give you advice, but they can talk to you about your personal situation and help answer any questions you may have about AVCs. You can also visit Prudential at The Academies Show, Birmingham on the 22nd November at stand H18.

Prudential

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