Which of the following is a valid vehicle to contribute AVCs?

• A. Personal Retirement Savings Account
• B. Buy-Out Bond
• C. Retirement Annuity Contract
• D. Section 785 policy

Answer: (A)

AVCs are extra contributions added to a pension arrangement to boost retirement benefits. To be a valid vehicle, the product must be a pension arrangement that can accept additional contributions and be used flexibly for ongoing top-ups.

A Personal Retirement Savings Account is designed precisely for this purpose. It’s a flexible personal pension wrapper that allows regular or ad hoc AVCs, offers tax relief, and provides investment choice and portability. That makes it the suitable vehicle for topping up retirement savings with AVCs.

The other options serve different roles. A Buy-Out Bond is typically used to transfer or crystallize benefits from an employer scheme rather than to receive ongoing AVCs. A Retirement Annuity Contract is a private pension product, but in many contexts it isn’t treated as the standard vehicle for regular AVC top-ups. A Section 785 policy is a specialized buy-out policy and not used as a vehicle for ongoing AVC contributions.