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Skip Navigation LinksHome > Scheme guide > Final Salary Benefits section > Maximising your pension

Maximising your pension 

If you want to save more with USS, you can pay into the Money Purchase AVC (Prudential) by regular or lump sum contributions. This is an investment-based facility but you have the choice of where your money is invested:

  • Pay a large proportion of your available earnings into this AVC (subject to the limits described below)
  • You choose where the money is invested and therefore the level of risk
  • Flexible so that you can reduce or have breaks in your contributions
  • Options as to how you use your fund on retirement, including tax-free cash (subject to an overall limit) additional pension from Prudential, another pensions provider or from USS
  • The ability to transfer your fund to another pension provider
  • Please note that for new MPAVC accounts an exit charge applies to your MPAVC fund value should you withdraw those funds due to retirement, within three years of your first contribution. Full details are available from Prudential.

If you want more information about the Money Purchase AVC, give Prudential a call on:

Tel: 0800 012 1439 (existing members call the customer call centre on 0845 515 914)

Alternatively, visit the Prudential website here for more information and contact details.

To find out how you can keep your maximum yearly pension and have an additional tax free cash lump sum, use the Prudential calculator.

Money Purchase AVC exit charge

For accounts, where first contributions were received by Prudential after 19 August 2012, if the fund is withdrawn early it will be subject to an early exit charge in certain situations.

The table below shows the current level of exit charges that may apply.

Year of withdrawal %
During Year 1 3
During Year 2 2
During Year 3 1
After 3 years no charge

Charges may vary in the future and may be higher than they are now.

Please note: The exit charge will be applied after any Market Value Reduction has been applied to any disinvestment from the With-Profits Fund.

In what situations will the exit charge apply?

The main situations where an exit charge will apply are:

  • Having left USS a member transfers benefits to an alternative pension arrangement, including an alternative AVC
  • Retirements at any date with the exception of where benefits are being taken on the grounds of ill health
  • Where you take a short service refund from your scheme and AVC; and the value of your AVC fund (after charges) is greater than the value of the contributions paid

When will an exit charge not apply?

An exit charge will not apply if any moneys are withdrawn due to:

  • Death
  • Switches between investment funds
  • Retirement on the grounds of ill health
  • Claims on the grounds of serious ill health
  • If a member takes a flexible retirement, draws their MPAVC fund at that point and then opens a new MPAVC, this new MPAVC will not be treated as a new account, so long as the new MPAVC is opened within 31 days of the flexible retirement event. Therefore, the 3 years will count from when the original account was opened
  • Pension sharing on divorce

Do you need any help or guidance?

You can find further information from a number of different sources. If you go to our financial advice page you will find information about where to go for financial advice and general guidance about your pension. If you have a money purchase arrangement with the Prudential then their website at can provide you with some help.

If you want specific guidance on your options when you retire with the USS Money Purchase AVC please visit the Pension Wise website at

Access your Prudential account online:

Click here to be taken to the Prudential website.

USS members have access to:

  • Fund values
  • View individual contribution/plan records
  • Switch funds
  • Redirect contributions
  • Change Personal details

Maximum contribution to USS Money Purchase AVCs

USS does set a limit on how much you can pay in total each year as gross contributions (before tax relief) in to the Money Purchase AVC. The limit is the Annual Allowance for the year, which is currently £40,000, or your annual salary if lower.

So, if your salary were £85,000 pa you would be able to pay up to £40,000 pa as gross contributions to the USS Money Purchase AVC during the year. If your salary were £30,000 pa, then you could pay up to £30,000 pa to the Money Purchase AVC (of course you would have to ensure all other statutory/employer deductions are paid) during the year.


Please refer to the ‘Key Features’ document, available on request from Prudential or online at

Maximum benefits

HM Revenue & Customs (HMRC) introduced a tax system for pension schemes in April 2011. The system creates 'allowances' for the maximum pension benefits that members can accrue in a tax preferential way.

There are two different allowances:

  1. The Lifetime Allowance (LTA)
  2. The Annual Allowance (AA)
    (a) From April 2015, if you have drawn benefits from a defined contribution type pension arrangement but continue in membership of a scheme like USS, there may be tax implications if you then continue to make any money purchase AVC contributions to the USS Money Purchase AVC. Please refer to the limits to tax relief and tax-free benefits factsheet for more information about what’s called the ‘Money Purchase Annual Allowance'.

These allowances are relatively high and generally affect members with higher than average salaries and long service in the scheme. However, paying AVCs could get you closer to these limits. Full details on the limits are available from the limits to tax relief and tax-free benefits factsheet

If you’re not sure what’s best, you should seek financial advice. Please click here to view a list of financial advisers living locally to you. See the factsheet ‘Limits to tax relief and tax-free benefits' for full information.

Full information on the AVC options can be found in the AVCs factsheet and you can also speak with the pensions contact at your institution for more information and help.

Transfer benefits in to USS

You could increase the amount of service you have in USS by making a transfer into the scheme from a previous pension arrangement. Please refer to the section on Transferring-in benefits for detailed information on this option.

Transfers out of USS

If you leave USS you are entitled to transfer your benefits elsewhere. From April 2015 you also have the facility to transfer your money purchase AVC fund independently.

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