The Civil Service Additional Voluntary Contribution Scheme (CSAVCS) FAQ

What are Additional Voluntary Contributions (AVCs)?

AVCs are an extra contribution you can pay to increase your pension. The contributions are invested with a provider and your fund builds up until you can, and want to, use it.

You can also increase your pension by buying added pension in your main scheme.

Who are the CSAVCS providers?

The current CSAVCS providers are: 

  • Scottish Widows (Scottish Widows’ Fund and Life Assurance Society)
  • Standard Life (Standard Life Assurance Ltd).

If you wish to start contributing to an AVC then you can choose to make AVCs to one, or both, of the CSAVCS providers.

Equitable Life continue to provide services to members who started contributing to an AVC before 2001.  It is no longer possible to select Equitable Life as your new AVC provider.

How do I choose my provider?

You need to choose which pension provider you want to invest your contributions with. Cabinet Office has chosen the two AVC providers to offer the CSAVC scheme based on their financial strength, their funds, their charges, their administration and their willingness to work with us to provide the scheme. The providers are:

• Scottish Widows

• Standard Life

You may wish to speak to an Independent Financial Adviser before you make your choice. See the Financial Conduct Authority site for tips on finding an adviser: www.fca.org.uk

How do I start an AVC plan?

How do I make my contributions?

Contributions to the CSAVCS are deducted straight from your pay. You will need to apply at least one month before the deductions are due to be made. You can increase, decrease or suspend your contributions.

Will my employer pay into my AVC?

Your employer will not contribute to your AVC.

What are the tax implications of paying AVCs?

You will receive tax relief on contributions across all pension arrangements you contribute to, up to 100% of your taxable earnings. This is subject to the Annual Allowance.

The Annual Allowance is the maximum amount of pension savings you can make across all pensions in any tax year, which benefit from tax relief. If your pension savings in a year are more than the Annual Allowance, you might have to pay some tax on the amount over the Annual Allowance.

Details of the annual allowance can be found at:

www.gov.uk/tax-on-your-private-pension/annual-allowance

Do I pay National Insurance on my AVC contributions?

Yes, you pay National Insurance (NI) contributions at the standard rate.

How big will my pension pot be?

The amount of your pension pot will depend on:

  • The amount of money invested in your fund,
  • The performance of your investment fund,
  • When you decide to take your pension – that is, how long the money remains invested.

It is important that you give your pension fund a regular health check over the years to make sure you are on track to get the size of fund that you want. You will receive annual statements that show the value of your fund to help you with this. And remember that contributions made while you are young are going to have more years to grow with investment returns.

You may wish to speak to an Independent Financial Adviser to review your pension savings. See the Financial Conduct Authority site for tips on finding an adviser: www.fca.org.uk

Will the Government guarantee my pension?

The Government cannot guarantee your pension.

How do I choose what to invest in?

A successful investment is not simply one that delivers high returns (the money your investments earn). It is one that gives you the right balance of investment returns and security for your money.

What is the right balance will vary from one person to another and will also vary with age.

You must remember that the value of some investments can go down as well as up, and this is often shown in the returns available to investors. Put simply, if you are guaranteed that the amount you have invested can never go down, you cannot expect to get very high returns. On the other hand, if you are prepared to take the risk that your investment might go up and down in value, you would expect the possibility of higher returns as the reward for that risk.

Every situation is different and what is right for someone else may not be right for you. The most appropriate funds for you will be those, which most closely match your attitude to risk and investment. This might include things like the type of industries you are happy to invest in. For example, you might prefer to have your pension in an ethical fund, which does not invest in certain companies or sectors of industry. We suggest that you read the providers’ information packs and, if you need to, talk to the providers about the differences between the funds they offer.

You may wish to speak to an Independent Financial Adviser before you make your choice. See the Financial Conduct Authority site for tips on finding an adviser: www.fca.org.uk

Do I have to choose an investment fund?

You will see from the providers’ information that each provider offers a wide range of investment funds.

Read the providers’ information to find out about the different funds on offer. When looking at past performance, remember that it may not be a reliable guide to how they will perform in the future.

Information is available via the provider micro-sites:

http://www.scottishwidows.co.uk/civilservice/c-csavc-optionsmain.htm

https://www.standardlifepensions.com/civilservice_gavc/common-questions

What are ‘lifestyle’ funds?

Many providers offer a lifestyle option for people who don’t want to choose a fund. The basic idea is that your money is invested mainly in company shares (or equities) while you are young and then switched into less volatile investments as you approach retirement age.

You could manage your investments yourself in a similar way, but the lifestyle option means that the switching happens automatically. Lifestyle options are probably more appropriate for someone who thinks they will want to buy an annuity when they retire, rather than use their partnership fund for drawdown (please refer to the Q & A titled ‘how can I access my money’ for an explanation annuities and drawdown).

If you think that a lifestyle option could be right for you, remember that the details will vary from one provider to the other. In particular, you need to ensure the fund (or funds) used for investing when you are young are suitable and that the system for switching you into less volatile investments looks appropriate for you. If you choose a lifestyle option, it is very important that your pension provider knows when you plan to draw your pension, as this affects when they switch you into less volatile investments. You should make sure you tell your provider in good time when you plan to draw your pension.

How will I find out how my fund is performing?

Your provider will send you a statement each year. This will show the value of your fund and the contributions paid, together with a rough idea of what this may mean in pension terms at pension age. You should tell your provider whenever you change your address.

You can also view the performance of each of the funds on the providers’ websites (available for Scottish Widows and Standard Life members). Together with financial advisers, the scheme will also constantly review the investment and administrative performance of the providers, and will report on this to the Civil Service Pensions Board.

You can track the performance of your fund at any time by registering with your provider, to use their secure online facilities.

How do I change or switch my investment funds?

Read the providers’ information to find out about the different funds on offer. When looking at past performance, remember that it may not be a reliable guide to how they will perform in the future.

Please note: It is important to make sure you understand what you are giving up and what you are getting in return, for example your existing fund may contain guarantees.

Information on the funds available and how to switch is available via the provider websites:

http://www.equitable.co.uk/

http://www.scottishwidows.co.uk/civilservicepartnership/c-csp-investment.htm

https://www.standardlifepensions.com/civilservice_gavc/investment-choices/your-investment-options/the-selected-range

You may wish to speak to an Independent Financial Adviser before you make your choice. See the Financial Conduct Authority site for tips on finding an adviser: www.fca.org.uk

What if I leave?

If you leave the Civil Service Pension arrangements, you will not be able to continue paying into the CSAVCS.

Your pension fund is yours, no matter what your job. You can leave it to earn investment returns or you may want to transfer your fund to another pension provider or to your new employer’s pension scheme. The choice is yours, but if you are considering transferring your fund to another provider or to a new employer’s pension scheme, make sure you understand what you are giving up and what you are getting in return.

Your employer will notify your AVC provider that you have left employment and the provider will then contact you separately.

When can I access my money?

Under current legislation, you can generally access your AVC at any time from age 55 (or age 50 if you joined before April 2006).

You don’t have to retire to take your pension. You choose the timing to fit in with your personal circumstances. You also decide whether or not you want to provide a pension for your dependants after your death.

If you are 50 or over, or are retiring on ill-health, you can get free impartial guidance on your options by booking an appointment with Pension wise.  Appointments are available by telephone or face to face and take about 45 minutes.  Further details are available at:

https://www.pensionwise.gov.uk/

Do I have to retire from my job before I can access my money?

No. Drawing your pension doesn’t have to be linked to retiring from work.

How do I access my money?

You will need to contact your provider to start the process.

How can I access my money?

You can usually take up to 25% of your pension pot as a tax-free lump sum although you are not required to do so.

Your options for the funds remaining after any tax-free cash is taken include: 

  • A fixed regular income that is guaranteed for life, also known as an annuity.
  • A flexible income via income drawdown. This allows you to either withdraw regular income, payable monthly or yearly, or to take unlimited withdrawals. (F)
  • Take your full fund as a cash lump sum. (F)
  • Or a combination of the options to suit your circumstances.

You may have to transfer your AVC account to a different pension arrangement before you can exercise some of these options.  Your provider can confirm the position.

Other than the tax-free cash lump sum all withdrawals are treated as taxable UK income.  Additionally if you take money from your account under a flexible option (marked F above) you will be subject to the Money Purchase Annual Allowance. Details can be found at:

https://www.gov.uk/tax-on-your-private-pension/annual-allowance

If you are 50 or over, or are retiring on ill-health, you can get free impartial guidance on your options by booking an appointment with Pension wise.  Appointments are available by telephone or face to face and take about 45 minutes.  Further details are available at:

https://www.pensionwise.gov.uk/

How much tax-free cash am I able to take from my AVC?

You will be able to take up to 25% of your AVC fund as a tax-free lump sum.

This is in addition to the tax-free cash available from your main scheme. 

What if I retire on ill-health grounds before I reach pension age?

If you retire early on ill-health grounds, your CSAVCs will become available at the same time as your main pension benefits.

You can get free impartial guidance on your AVC options by booking an appointment with Pension wise.  Appointments are available by telephone or face to face and take about 45 minutes.  Further details are available at:

https://www.pensionwise.gov.uk/

What happens if I die before I draw my pension?

If you die before you draw your pension, the AVC provider will pay the value of your account to the person named on the application form, and / or provider’s form.  The value of your pension pot will be the contributions that you and your employer have made, plus investment returns over the years.

You can complete a new nomination form at any time.  If you wish to update your nomination form please contact your AVC provider.

I need to report the death of a member, how do I do this.

If the member held an AVC with Scottish Widows or Standard Life please contact the AVC provider to report the death of the member. 

Scottish Widows

Standard Life

If the member held an AVC with Equitable Life please contact MyCSP

If you have not already done so please also advise MyCSP, who administer the Civil Service Defined Benefit pension schemes:

Can money be paid into my plan while I’m on a career break?

Contributions to your AVC are made via your salary therefore if you are on unpaid leave or a career break then you will be unable to make contributions.

I’m changing the number of hours I work, how does this affect my AVC?

As it is your AVC plan, you decide if you wish to make voluntary payments to increase the value of your pension.  If you wish to alter the amount you contribute, or cease payment, then you should contact your employer.

I am getting divorced what happens to my AVC account?

If you are going through a divorce, dissolution or annulment, your AVC account could be subject to an earmarking order or a pension sharing order. This means that your spouse/civil partner may be awarded some of your pension and/or lump sum by the Court presiding over your divorce/ dissolution settlement.

If your pension is subject to an earmarking order, the Court will instruct your provider to pay a specified amount of your pension and/or lump sum to your former spouse/civil partner when you retire.

Under a pension sharing order, your benefits will reduce by the percentage specified in the court order. In Scotland, the order will state a cash amount rather than a percentage. Pension sharing is a permanent transfer of your benefits and will not revert back to you on the death of your former spouse/civil partner.

Your solicitor can provide you with further details of the different options and how they will affect you in your circumstances.

How do I contact Scottish Widows?

Telephone:

0800 838 312
+44 131 655 6999 if calling from abroad

Monday to Friday: 9am - 6pm
Saturday: 9am - 1pm

Office address:

Scottish Widows
15 Dalkeith Road 
Edinburgh
EH16 5BU

How do I contact Standard Life?

Telephone:

0800 634 7479
Monday - Friday, 9am-5pm

Office address:

Standard Life
Dundas House
20 Brandon Street
Edinburgh
EH3 5PP

Is there anyone I can talk to about my pension?

Financial Advice

You may wish to speak to an Independent Financial Adviser about your pension plans. See the Financial Conduct Authority site for tips on finding an adviser: www.fca.org.uk

General Pensions Guidance

The Pensions Advisory Service (TPAS) provides information and guidance to help make you make informed decisions about your pensions and retirement plans.   TPAS is an independent organisation that is grant-aided by the Department for Work and Pensions (DWP). 

Telephone:

0300 123 1047

Website:

https://www.pensionsadvisoryservice.org.uk

Guidance on your options at retirement

If you are 50 or over, or are retiring on ill-health, you can get free impartial guidance on your options by booking an appointment with Pension wise.  Appointments are available by telephone or face to face and take about 45 minutes.  Further details are available at:

https://www.pensionwise.gov.uk/