Using AVCs at retirement

If you make Additional Voluntary Contributions, your AVC Account will fall within the Defined Contribution (DC) section of the Scheme. This means you have a number of different options for how you access the money you have saved in this account.

A pension for life – an annuity

You can take up to 25% of your AVC Account as a tax-free cash lump sum, and then use the balance to buy an annuity from an insurance company which pays you an income for the rest of your life.

A flexible income

The ABF Pension Scheme would pay you up to 25% tax-free cash and you can transfer your AVC Account from the ABF Pension Scheme into another arrangement that facilitates what’s known as ‘flexible drawdown’. This allows you to draw out income or cash lump sums as and when you need it.

A series of cash lump sums

You can transfer the whole of your AVC Account into another arrangement and take your savings as a series of cash lump sums. 25% of each lump sum would be tax-free and the balance would be subject to income tax for the relevant tax year.

A cash lump sum

You can take the whole of your AVC Account, in one go, as a cash lump sum from the ABF Pension Scheme. 25% will be tax-free and the rest will be taxable.

Free guidance

The Government has launched a new ‘Pension Wise’ service to give free impartial guidance to anyone with DC pension savings. We recommend that you use this service to get guidance and support with your retirement planning decisions. If you are approaching retirement and interested in this service, you’ll find further information at

Please note that this is only guidance and the Pension Wise service cannot provide advice.