Aviva deferred anuity pension

JohnCelt

Hello

I have a deferred anuity personal pension with Aviva, which would pay me a guaranteed annuity at age 70.

However, I wish to start taking my pension at 65, just after the new pension rules apply in April. I have decided that I would like an income drawndown arrangement and was told by Aviva that this cannot be done with them with this type of pension.

Can I move the pot to another pension provider, who will allow me to use income downdrawn or might I be able to move the pot directly to the likes of Bestinvest, without incurring a tax liability at the point of moving it.

Thank you for your help

dunstonh

I have decided that I would like an income drawndown arrangement and was told by Aviva that this cannot be done with them with this type of pension.

It should be noted that no providers yet know or have published what their plans for the new rules are going to be.

Expectation is that legacy plans will not likely facilitate the revisions to drawdown unless they already offer drawdown under old rules. However, transferring between old plans and modern plans is a way to resolve that.

When you say deferred annuity personal pension do you actually mean a section 32 buy out bond? If so, it may not just be a guaranteed annuity rate but also GMP or increased tax free cash (more than 25%). These would be lost on transfer. it is also possible that GARs exist earlier than 70 (most plans that have a GAR will adapt that GAR for different ages and not just one age).

xylophone

Is this a S32? http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm02104010.htm

http://www.financialadvice.net/s32_buy_out_plan/zone/1288

JohnCelt

Thanks for your prompt responses. I perhaps should have been more specific.
This is a private pension, I was self employed.
The policy type is PP1 S226 V8 and V9 series.
Aviva confirmed to me a while back that there is no GAR but there is a GP which is payable age 70 but can be adjusted if taken earlier.
My most recent statement shows that the final bonus is included in the "Open Market Option" figure "to buy an income from another insurance company".
My concern is that even by transferring the fund to another company, I may be stuck with an annuity and no option to take income drawndown.

Thank you again for your advice/opinions

Your_Hero

JohnCelt wrote: »

Thanks for your prompt responses. I perhaps should have been more specific.
This is a private pension, I was self employed.
The policy type is PP1 S226 V8 and V9 series.
Aviva confirmed to me a while back that there is no GAR but there is a GP which is payable age 70 but can be adjusted if taken earlier.

Ask for a quote at 65, and see what the guaranteed pension is. Sometimes this is quite valuable and probably best to keep it and actually buy an annuity. But it does depend on your circumstances of course.

My most recent statement shows that the final bonus is included in the "Open Market Option" figure "to buy an income from another insurance company".

And how does it compare with another insurance company? Bear in mind that this will not factor in any health issues that you may have which could give you a higher income.

My concern is that even by transferring the fund to another company, I may be stuck with an annuity and no option to take income drawndown.

Thank you again for your advice/opinions

Why do you think drawdown is right for you?

You can easily find a company that does offer drawdown. However, you should not use drawdown just because it is "in fashion" because for the majority, drawdown will not be suitable!

xylophone

http://www.financialadvice.net/old_annuity_policies_s226_s620/zone/373

http://parsonagefinancial.co.uk/the-guide/a-guide-to-pension/self-employed-pension-plans-retirement-annuity-contract-s226-plans/


There is some information on this type of policy in the above. It may be of interest?

Might you need the advice of an IFA? https://www.unbiased.co.uk/

dunstonh

The policy type is PP1 S226 V8 and V9 series.

Thank you. That makes a section 226 retirement annuity contract. A bit different to what you described earlier. However, a guaranteed annuity rate may still be available at 65. You should investigate at the very least as it may be something like 15% for 70 but 10% for 65. Or there may be no GAR at 65. Knowing the options is important to making the decision as it is cast in stone once done.

JohnCelt

Sadly, there is no guaranteed annuity rate with this policy, dunstonh - only a guaranteed pension.

I had read on here a while back that S226 policies from before the mid 80's may carry a GAR. I enquired to Aviva in January 2013 and they wrote back to say that this policy does not contain any GAR and this is a deferred annuity contract with a guaranteed pension.

The policy was originally taken out with Yorkshire General in February 1983 and I stopped paying the premiums some 10 years later. I don't have the original policy, only form S.E.P.C. which is a policy certificate type thing.

I presume Aviva are correct in this.

I have one or two health issues which would certainly enhance an annuity, but at the same time I need to provide for my wife, who is younger and healthier than me. The cost of a joint life annuity is to say the least, unattractive and that is why I am drawn towards income drawndown. As Aviva cannot offer me this option, I need to know that I can (if I want to) transfer the fund to a company who can.

Thanks again.

xylophone

You appear to have other pension provision

https://forums.moneysavingexpert.com/discussion/comment/65072064#Comment_65072064 and presumably will be drawing your state pension - what is your wife's state pension /personal pension provision?

Might having an IFA cast an eye over your retirement plans clarify your ideas?

JohnCelt

Nope xylophone, it's the same pension I am referring to.

My wife has an old works pension currently worth arouns £90k. She is a victim of the new State Pension age changes and instead of collecting her State Pension at age 60, must now wait til she is 66 in March 2021.

Yes indeed a visit to an IFA will need to be done, I just wanted to know a little more about my likely options prior to a consultation.

Thanks for your time, xylophone.

mgdavid

JohnCelt wrote: »

....... She is a victim of the new State Pension age changes and instead of collecting her State Pension at age 60, must now wait til she is 66 in March 2021.
.........

Hardly new, the equalisation of female SPA was announced last century! (1995 to be precise)