What Happens if Aviva Goes Bust?

Albermarle

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


From the previous post, it appears you are with Aviva platform and not Aviva Life and Pensions (it makes a difference).

As far as I understand, if you have a traditional personal pension or similar with an insurer like Aviva , invested just in Aviva insured funds ,you have unlimited 100% compensation .

If you have a SIPP ( with HL for example) you are covered £85K for HL platform and separately £85K for each fund provider .

So if you have a SIPP with Aviva, that is still invested in Aviva insured funds , do you still have 100% compensation cover ?

Just asking out of curiosity as the chance of Aviva actually going bust is remote.

dunstonh

So if you have a SIPP with Aviva, that is still invested in Aviva insured funds , do you still have 100% compensation cover ?

Yes. if you are on the Aviva platform SIPP using insured funds (what they call core funds) then you get 100% FSCS protection on that part.  If you mix and match core funds with choice funds (choice = UT/OEICs) then you get 100% on the insured funds and £85k per fund house on the UT/OEICs.  If you go UT/OEIC only then it is £85k per fund house as you are already aware.

cfw1994

dunstonh said:

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.

Far more thorough answer than mine, as should be expected ;-)
In bold: what I was trying to say tactfully.   
Blindingly obvious decision to be made there.....if you are prevaricating over that, why bother concerning yourself with how Aviva do as a business: deal with things you CAN influence, as my Dad used to tell me!