Are A.V.C's value for money?

Animal_Jones

I had a illustration of what my A.V.C was worth last year:the value of the account was £40 thousand and the estimated pension this year is likely to be £1,600 a year.My question is -are A.V.C's value for money?

EdInvestor

An AVC is just a tax wrapper. It's the investments that are contained within that are important.What is your money invested in?

Regarding the estimated pension, the insurance company will usually choose the most expensive type of annuity (index linked, full spouse pension, guarantee, etc) available.

You may wish to put the figures into the pension annuity section of this site to get a broader idea of what pension you might get:

www.fsa.gov.uk/tables

dunstonh

AVCs are a more old fashioned wrapper and with a few exceptions can be out of date compared to more modern options. It really depends on how the AVC integrates with the main occupational scheme. If it can be used in the lump sum calculation, that can made the AVC the best option. If not, then things like added years, hybrid options, personal pensions, stakeholders, SIPPs and ISAs can all come in better.