Median additional voluntary contributions (AVCs) have risen by £200 per member per annum over the last year. This figure now stands at £2,000 per member per annum, up from £1,800 last year and £1,000 in 2005.

According to Hewitt Associates' AVC survey 2007, the popularity of AVCs remains constant despite the removal of the requirements to offer the facility under pensions simplification legislation in April last year. The overall average take up of AVCs still stands at 14%.

Some 86% of the schemes surveyed use an external provider to offer an AVC facility to employees. But when it comes to providers' communication of AVCs to pension scheme members, almost a quarter (23%) of respondents say that their provider's approach is 'poor'. Internet-based support was particularly unpopular, as two-thirds of respondents rated this as poor. Just 10% of schemes believe that their provider's communication of the scheme to members is excellent.

When it comes to the providers selected by employers, Prudential, Standard Life and Legal & General are the most used covering 60% of the AVC market between them.

What do employers' think of providers' communications of AVCs?

Communication from providers is average35%

Communication from providers is very poor32%

Communication from providers is good20%

Communication from providers is excellent10%

Source: Hewitt Associates