The two most popular teachers’ AVC schemes are the “with-profits” fund and the unit-linked scheme. Around 110,000 teachers have invested in Prudential AVCs under the umbrella of the Teachers’ Superannuation Scheme. Fewer than 5, 000 of these have opted for the unit-linked route. One of the main differences between the schemes is that investment returns from the with-profits fund are distributed through annual bonuses, which smooth out the ups and downs of investment performance and reduce the risk.
Investors choosing the unit-linked approach receive more benefits than the with-profits contributors if their investments perform well. Conversely, if their investments perform badly they stand to lose more.
Want to keep reading for free?
Register with Tes and you can read five free articles every month, plus you'll have access to our range of award-winning newsletters.
