What Happens if Aviva Goes Bust?

Foresty_Forest

My entire pension and Isa savings are in Aviva. What happens if Aviva goes bust? Is this an eggs in one basket scenario?

cfw1994

Short answer is no: money is held within funds that Aviva manage, they are not invested in Aviva (of course some of the funds might have money in Aviva).
Do you understand how your pension fund is invested?

Long answer is dependant on types of pension.   

My take (as an Aviva pension customer) is that firstly, it is highly unlikely Aviva would “go bust”.  If it did, the Financial Services Compensation Scheme limit for a long-term insurance product such as a personal pension is 90 per cent of the value, with no upper limit.

If all the funds you were invested in went bust, well, then the problems are bigger than your pension fund.   It that worries you, invest in beans, bottled water, bunkers and guns!!

 

cfw1994

Incidentally, I just recalled that you were with an IFA who wanted to move you to True Potential.
Maybe that IFA has done a poor job explaining your money to you....have you resolved that move?  Sounded a great one for the retiring IFA, less so perhaps for you, the customer.....

Foresty_Forest

cfw1994 said:

Incidentally, I just recalled that you were with an IFA who wanted to move you to True Potential.
Maybe that IFA has done a poor job explaining your money to you....have you resolved that move?  Sounded a great one for the retiring IFA, less so perhaps for you, the customer.....

Yes that's me. I haven't made a decision yet on that. 

Foresty_Forest

cfw1994 said:

Do you understand how your pension fund is invested?

 

I have some idea yes, I wasn't sure if the money was somehow in the possession of Aviva. Obviously it isn't. Maybe there's a brief window between Aviva receiving my cheque and it going into the pension/ISA?

Grumpy_chap

Why does the OP think Aviva will go "bust"?

Foresty_Forest

Grumpy_chap said:

Why does the OP think Aviva will go "bust"?

If.

Grumpy_chap

"What happens if XYZ goes bust" is the sort of question one would normally only ask in the event that the individual posing the question had some reason to suspect the outcome was likely.  

Or the question is asked for the purpose of scaremongering.

Otherwise, we could fill these boards with all sorts of unlikely hypothetical scenarios.

• "What happens if Tesco goes bust?"
• "What happens if I get run down by a bus?"
• "What happens if the snow comes down in June?"

Sandtree

cfw1994 said:

Long answer is dependant on types of pension.   

My take (as an Aviva pension customer) is that firstly, it is highly unlikely Aviva would “go bust”.  If it did, the Financial Services Compensation Scheme limit for a long-term insurance product such as a personal pension is 90 per cent of the value, with no upper limit.

If all the funds you were invested in went bust, well, then the problems are bigger than your pension fund.   It that worries you, invest in beans, bottled water, bunkers and guns!!

 

The first point is key... "pension" is used too often to describe things that are not pensions (eg annuities) and the cover provided is different depending on what it really is... 

https://www.fscs.org.uk/what-we-cover/pensions/

As from the above the FSCS pays 100% of annuities and pensions without an upper limit however for SIPP Operator failing there is a cap of £85,000 per firm. Given you have an ISA investment, which is also capped at £85k per firm, you may have an overall £85k limit across both SIPP and ISA (if your using Aviva as a SIPP provider)

The FSCS is also a little cagey about some things like index linked benefits in pensions/annuities

dunstonh

Foresty_Forest said:

My entire pension and Isa savings are in Aviva. What happens if Aviva goes bust? Is this an eggs in one basket scenario?

From the previous post, it appears you are with Aviva platform and not Aviva Life and Pensions (it makes a difference).    You are not invested in Aviva directly (its probable your UK equity fund holds Aviva shares within it).   Aviva are just an administration platform.  Your assets are ring fenced.      If Aviva fail (which is extremely unlikely given the solvency requirements that insurers have in place and the way an insurer is not one company but a collection of different companies, it is unlikely it would stop trading as it has a value to the administrator to be sold off.  If trading is stopped, value is lost.  However, if a buyer cannot be found (and one would with the platform business and the legacy life and pensions business) then you would need to transfer your pension and ISA to another platform/provider.  It would be a managed run down.

If Aviva were in trouble (and they are not) then the first signs of this would be them closing for new business.     They would also start selling off parts of their business.   However, that in itself can happen when they view that part of the business is not profitable enough.     Some shareholders have been trying to get Aviva to break up for years.    It is the last insurer that operates in most areas.      Aviva themselves may feel that selling off their legacy life and pensions book in the future may be more viable than retaining it.    They already offer special terms to get legacy products moved to their platform as they try and wind it down.

It is not an eggs in one basket scenario.   If you had 10 providers/platforms and each one invested in the same investment fund, then that is eggs in one basket.

Yes that's me. I haven't made a decision yet on that. 

That shouldn't need thinking about. A resounding no should be the answer.   It is not being recommended for your benefit.

Black_Cat2

Grumpy_chap said:

"What happens if XYZ goes bust" is the sort of question one would normally only ask in the event that the individual posing the question had some reason to suspect the outcome was likely.  

Or the question is asked for the purpose of scaremongering.

Otherwise, we could fill these boards with all sorts of unlikely hypothetical scenarios.

• "What happens if Tesco goes bust?"
• "What happens if I get run down by a bus?"
• "What happens if the snow comes down in June?"

Answers:

If Tesco goes bust, move to shopping at Sainsburys

If you get run down by a bus then you'll have the definitive answer of whether God/Afterlife exists (knock once for yes, twice for no)

If the snow comes down in June... yippee!  Time to build a snowman and hopefully be snowed in so don't have to go to work! 

😹😹😹