A £150/month decision turned into £154,000 tax-free
A public sector worker on why he wishes he'd started sooner, and why he now tells everyone he meets to do the same.
David had heard about Shared Cost AVCs for years. But like most people, he never quite got round to setting one up. There was always something else to deal with first.
Then, about seven years ago, a colleague invited him to a Shared Cost AVC seminar. David went along. That decision would eventually grow into £154,000 tax-free.
"I deeply regret doing it late. I wish I’d done it sooner."
Starting small, then going all in
David didn't overhaul his finances overnight. He started small, around £150 to £200 a month, and got a feel for how it worked. But the more he understood, the more he committed. Before long, he was putting in 50% of his salary.
The maths was hard to ignore.
Take £100 as salary, and you lose a chunk to tax and National Insurance.
Put £100 into his AVC, and the full £100 gets invested.
"If you’ve got £100 sitting in your salary and you put it in your Shared Cost AVC, 100% of that goes in. You’re not paying tax. You’re not paying National Insurance.”
The numbers, seven years on
David is the first to admit the results surprised even him.
£160k |
£154k |
£27k |
£23k |
|
Total AVC pot |
Available tax-free |
Saved in tax |
ISA profit from reinvested tax savings |
"It’s been the best investment I have ever made.”
Retiring at 60 on his own terms
David is retiring earlier than most. His NILGOCS pension will bring in around £23,000 a year, and he plans to top that up with work he enjoys.
He wants time. Freedom. The chance to do the things he's been putting off, like getting his fishing rod back out, while he's still fit enough to enjoy them. He's not chasing luxury. He's buying back his life.
The Shared Cost AVC is what makes it possible.
The AVC evangelist
David describes himself, with some amusement, as an "AVC evangelist." He corners colleagues. He brings it up unprompted. He walks younger members of staff through signing up. He tells anyone who'll listen to start now, even if it's just £20 a month.
“You’re saving money on tax. Who wants to pay tax on their money?”
His message is simple: this isn’t a luxury investment for people with spare money. It’s a tax-efficient decision that anyone in the public sector can make. The earlier you start, the more compound growth does the heavy lifting.
“Even £20 a month, that’s money invested. That’s money working for you.”
David's only regret is waiting. Yours doesn’t have to be.