Cashing in a small pot pension with Aviva

Aristotle67

My partner is trying to cash in and take her small pot pension with Aviva. The amount in question is less than £10,000. She and I know nothing about pensions and need some advice.

She was initially given a figure she could take of £9480. When she said she wanted to do this she was then sent a quote via email with a lower figure - £9420. She queried this and was given the usual line that stocks and shares can go down and that was the close of business figure. She understand that this happens but she thinks the drop in figures is too much.

Before responding to this she rang Aviva and they said that the current figure was £9470 and that if she responded to their email quoting this figure she would get this revised amount. She did so and heard nothing for a few days.

The next email said that because she responded with the revised figure, she could not get the £9470. She asked why it took them a few days to advise me of this, when she understood the response was to be immediate. They could not answer this.

They have sent her another quote and asked her to respond with this new figure, which is now £9320.

It seems to me that whenever there is a higher figure and she tries to accept this she is knocked back and is given a figure which is much less. The most recent figure is too low. I think they are trying to rip her off as every time she gets a revised quote it is less than she was expecting, and I suspect that delay of a few days was to allow the amount to drop.

Can someone advise us what to do so that she gets the maximum amount from her pension, please?

dunstonh

She understand that this happens but she thinks the drop in figures is too much.

£60 on that value is 0.63%. Stockmarkets, in general, fell by 12% in October. So, why does she feel a 0.63% drop is too much?

I suspect she doesn't really understand that this happens.

The next email said that because she responded with the revised figure, she could not get the £9470. She asked why it took them a few days to advise me of this, when she understood the response was to be immediate. They could not answer this.

Aviva generally use the day the form was received as the pricing point. That price may not be known and set until the next day though (as fund prices are not real time but only priced on the day and you get the price at the next dealing point - usually the next day).

Each time a revised value is requested, they are just taking the value at that point. No more. no less.

. I think they are trying to rip her off as every time she gets a revised quote it is less than she was expecting, and I suspect that delay of a few days was to allow the amount to drop.

You are wrong. Aviva do not get this difference. It is just the daily value moving around and we have had a negative period.

Can someone advise us what to do so that she gets the maximum amount from her pension, please?

Go back in time about 2-5 years and derisk the investment. That is what should have been done. A phased risk reduction over the years leading up to the withdrawal should have been instigated.

However, if you don't do that, then you should immediately move the fund to the deposit fund as soon as you know you are taking the money out. This avoids any more market volatility.

As neither of the above were done, the value was still subject to the ups and downs of the markets on a daily basis. Hence why the value was going up and down. The last 6 weeks have been a period of decline. Tomorrow could be better. Or it could be worse. There is no way to know.

If I was to answer your question exactly how you asked it (rather than what you really meant) then way to get the maximum amount from her pension is to leave it until she dies. Or possibly leaving it until age 74 and 300 days depending on health at the time.

Aristotle67

Thank you very much for responding, dunstonh.

I suspect she doesn't really understand that this happens.

Probably not; and that goes for me too.

Each time a revised value is requested, they are just taking the value at that point. No more. no less.

I see what you are saying, but there is something happening which seems to me like it is not in my partner's favour.

Every time we have telephoned and been quoted a figure, this figure is much higher than the actual written quote that my partner receives by email and that she is required to respond to. If these quotes had sometimes been higher as well as lower, it would not raise a concern. But it always seems to be lower.

Go back in time about 2-5 years and derisk the investment. That is what should have been done. A phased risk reduction over the years leading up to the withdrawal should have been instigated.

This is something neither of us have heard of or understand. What has happened is that my partner is really stressed out, has had enough of work, and has just decided in the last two weeks that she is going to take early retirement. She had a meeting with a financial adviser who suggested she take the money is this pension pot as it is worth less than £10,000. She has three other pension plans, one of which has a value of around £267,000. Thus, it is only in the last fortnight that she has decided to retire and cash in this particular pot.

Your message seems to suggest that the investment can be derisked retrospectively. How is this achieved and does it take time? What impact will it have on my partner's pension pot?

However, if you don't do that, then you should immediately move the fund to the deposit fund as soon as you know you are taking the money out. This avoids any more market volatility.

Presumably, that is something we need to ask Aviva to do and would mean moving the fund at the amount which we have been quoted, which is the lowest amount so far. That would mean it couldn't go down, but also that it could not go up.

We are disappointed with the way this has gone so far. All my partner wants is her money at one of the favourable quotes, not at one of the unfavourable quotes.

When my partner responded to the email quote on Friday of £9420, she did after speaking to the Aviva CS agent who had the figure on the screen in front of her - £9470. She replied to the quote immediately (that same Friday) and used the figure of £9470 - as she was told to do by the CS agent. She expected to hear on Monday that this had been accepted and would be processed. It was only today that Aviva got back to her to say this could not happen. They have offered no explanation as to the delay.

It is clear that had Aviva processed this on Monday that my partner's pot would be higher than now. Can we hold Aviva to this figure, as the CS agent told her to use the £9470 figure. If the CS agent was wrong to say this, I do not think my partner should suffer because of the Aviva CS agent's mistake. They should allow her the £9470 figure or, at the very least, allow her to have the £9420 figure. If that means that Aviva have to make the figure up out of their funds, then so be it. They should train their CS agents to give accurate advice.

Furthermore, the delay which has seen the reduction in the pot value was not due to anything my partner had done as she followed the instructions given to her by the CS agent. The delay was caused by Aviva taking until Thursday to respond having assured us they would process matters on Monday. Again, my partner should not be penalised because of Aviva's failing.

Sorry to be so determined but I am by profession an academic lawyer and if this was a matter within my areas of interest I would be handling this without difficulty and would ensure that the company does not get away with what has happened. I have done this so many times. Companies always resist, of course, but in the end they buckle.

Unfortunately, pensions are an area I know nothing about and so some further advice and guidance would be welcome.

dunstonh

I see what you are saying, but there is something happening which seems to me like it is not in my partner's favour.

The markets are not being personal. We have had one of the longest losing streaks in the last 5 years. Its just timing and luck.

She has three other pension plans, one of which has a value of around £267,000. Thus, it is only in the last fortnight that she has decided to retire and cash in this particular pot.

Given the recent market downturn, she ought to look at the value of that because I suspect that will give her nightmares if 0.63% down is concerning her.

Your message seems to suggest that the investment can be derisked retrospectively. How is this achieved and does it take time? What impact will it have on my partner's pension pot?

No. it was part tongue-in-cheek and part to let others reading this realise what they should be doing. There are a lot of lurkers who read messages without posting. So, a lot of what is written is for them.

Presumably, that is something we need to ask Aviva to do and would mean moving the fund at the amount which we have been quoted, which is the lowest amount so far. That would mean it couldn't go down, but also that it could not go up.

It could still go down as if you asked them say this afternoon, the price you will get will be set tomorrow morning. So, there is still one day of movement to factor in. That could be positive. it could be negative.

It is clear that had Aviva processed this on Monday that my partner's pot would be higher than now. Can we hold Aviva to this figure, as the CS agent told her to use the £9470 figure.

Emails are not a great way to communicate. They go through a server and go into a queue to be picked up. The servicing queue may be multiple days. It was processed on Monday, it would have Tuesdays price. It would not have Friday's price (which is technically the price at opening on Friday morning).

Furthermore, the delay which has seen the reduction in the pot value was not due to anything my partner had done as she followed the instructions given to her by the CS agent.

The reduction is not due to Aviva either. It is due to market conditions. What is key is the date the Aviva received the written form.

Sorry to be so determined but I am by profession an academic lawyer and if this was a matter within my areas of interest I would be handling this without difficulty and would ensure that the company does not get away with what has happened. I have done this so many times. Companies always resist, of course, but in the end they buckle.

The end consumer has every right to raise a complaint. It seems here that the complaint is that they did not deal with it instantly but took 24-48 hours (assuming they already had the form). That would not be considered unreasonable for a service standard. Especially as Aviva usually quote around 7-10 days. Given the very small amount, they will probably pay because it's not worth the resources for such a tiny amount. Although they may decide to dig their heels in as they cant always be seen to be soft touch even if the amounts are small. Both things happen and you dont know what side of the coin you are going to get.

Aristotle67

Thank you very much for your second and thorough reply, dunstonh. I have taken on board all that you have said.

My partner and I are indebted to you.

Best wishes.