aviva - reattribution offer

djn576

i've just received aviva's rettribution offer - for me it's about £400.

i'm mindful that there are some clever people on the board - and before i sit down & go through all the paperwork i wanted to ask do you think this is a 'no brianer' & are you accepting the offer or are you going to hold on?

tnxs for your views.

thriftytracey

I too have had an offer of £1700. To be honest we could do with this money as my OH is unemployed but I won't take it if I feel that it is a "bribe" and would be losing out in the long run. Lets face our pensions have a gloomy forecase already. I don't have a financial adviser and I too would appreciate any advice.

missile

I would suggest it is a no brainer and I will certainly be voting yes. For sure it is a bribe and you are right to be suspicious of Aviva, they are not doing it for your benefit, but why do you think you will be losing out in the long run?

Can I ask what was the value of your qualifying investment?

dunstonh

I'm telling all my clients to vote yes and take it. As missile says, its a no brainer.

If you dont take it, all it means is the pot goes back and gathers cobwebs for the next 20 years when they try it again (perhaps cynical but also probably likely). Will you have your NU WP investment by then? Probably not.

Lets face our pensions have a gloomy forecase already.

a) Why?
b) Most Aviva pensions offer upto hundreds of investment funds and you have very good investment options and potential offered by these. The only reason they would be gloomy is if you are unrealistic with your contribution or are still using an obsolete plan with obsolete investments.

thriftytracey

In return for accepting the incentive you "give up your interests in any potential future special distributions from the inherited estates of two of the Aviva with-profits funds."

There is a guidance booklet which isn't the easiest to understand as it seems to be dependent on a number of different variables and does say you should consider taken independent financial advice.

I have a pension to which I have been contributing for the past 15 years.

parcival

Our offer is about £1300. As I read it it seems like a no brainer. The chance to get something in the future may never happen. We'll take the money now and cash in the With Profits at the 10th aniversary with no MVR.

Blastarama_2

I dont know what happened about all the initial commotion over the whole issue? There was once a big debate about who should get what with this offer us 90% and the shareholders 10% or the other way round. By the size of the offers looks like we got the 10% part in the end

We have two endowments which are 9 years old we only got offered £200 for each which is less than I was expecting by about £100 on each. Bit peeved as I have waited just about 2 years for this. Have wanted to sell the endowments once they were old enough but when all this started and figures in the 1000's were banded about I decided to wait.

I am waffling ... to the point of my question: Now I am wondering if its worth accepting the offer. I'll get £400 but will accepting devalue the endowments sale value? I dont know what companies that buy endowments look for so no idea. Anyone with any ideas on this?

Cheers

dunstonh

There was once a big debate about who should get what with this offer us 90% and the shareholders 10% or the other way round. By the size of the offers looks like we got the 10% part in the end

Stockmarket crash of 50% and Claire Spottiswood not accepting early NU offers (which would have been a lot more than this with hindsight and paid over a year ago).

when all this started and figures in the 1000's were banded about I decided to wait.

That was the average figure. 2 small endowments only 9 years old are going to be below average.

I'll get £400 but will accepting devalue the endowments sale value?

Shouldnt do. There isnt much of a second hand market at the moment due to liquidity issues but NU still have good enough potential to make them desirable enough to buy. There is also the mortgage promise values for many endowments which can be significant and make them worth having (without which they probably wouldnt be).

Blastarama_2

dunstonh wrote: »

Stockmarket crash of 50% and Claire Spottiswood not accepting early NU offers (which would have been a lot more than this with hindsight and paid over a year ago).



That was the average figure. 2 small endowments only 9 years old are going to be below average.



Shouldnt do. There isnt much of a second hand market at the moment due to liquidity issues but NU still have good enough potential to make them desirable enough to buy. There is also the mortgage promise values for many endowments which can be significant and make them worth having (without which they probably wouldnt be).

No idea what mortgage promises are, I'll look that up. Thanks for the information

Think I will have to sit down at some point and look at all this again. After all my decision to sell these is two years old and it wouldent be of any financial gain to me right now as the mortgage is on a tracker so were paying about £50 a month and about £210 in total with the endowments. No way a repayment is going to be anything like that low so gives me time to way up the situation.

Cheers

dunstonh

No idea what mortgage promises are, I'll look that up. Thanks for the information

In 2001, NU agreed to cover the shortfall on the 6% projection figure. In 2004, realising that it could be an open cheque book, they capped it at whatever the 2001 figure was. So, if your endowment was falling short by say £8000 in 2001 at the mid rate projection, they gave you an £8000 mortgage promise value. Now, on maturity, if your endowment falls £10,000 short, they will increase the maturity by £8000. if the endowment falls short by say £5000, then they will increase it by £5000. The mortgage promise increase cannot exceed the target amount. I have seen mortgage promise values in the hundreds of pounds range but also some in the tens of thousands of pounds range.

You dont see any reference to it on your paperwork apart from your 2001 and 2004 statements. The telephone staff at NU tend not to know what you are talking about if you ask them unless you get one that has worked there for a long time or has experience and knowledge of it. It is best to ask in writing if you havent got your 2001 or 2004 statements. If you have access to an IFA, they can find out for you as well.

If your endowment is unitised with profits and in the CGNU with profits fund, you may want to hold for a while. This one is benefiting from buying at low prices each month and I have noticed increases in the terminal bonuses on these recently (or reduction in MVRs) as well as the unit price still increasing a bit (one I saw a few weeks back in that fund has an annaul bonus rate of 3.5% currently which is higher than many mortgages). Also, it appears that not all TEP companies are aware of the mortgage promise value or if they are, they dont make you aware of it. Perhaps trying to value it without that consideration so they can pocket it later.

oldwiring

http://www.telegraph.co.uk/finance/personalfinance/5423242/Norwich-Union-customers-in-line-for-500-windfall.html
recommends acceptance in most casrs