Questions about drawdown UFPLS - final bonus and units cashed

Kamohoali

I have a (legacy) Pre 1995 Individual Personal Pension with Aviva, the majority of the pot which has a 4% guaranteed regular annual bonus. I stopped paying into it in 1999.

I am looking at taking a regular amount out of it as UFPLS (I.e. spreading the tax free sum across 10+ years). 

I have two questions:

1) I’d like to check that I’ve understood how the final bonus fits in. Say the current value without final bonus is £35k (which I understand is fixed, and won’t go down) and the final bonus estimated at £10k (which can go up or down). If I withdraw £4,500, is that 10% of the total fund I.e. including £1k of the final bonus?

2) Can I choose which units I cash in to draw the income. I have a small number which are not guaranteed to earn 4% bonus, so would, if I could, cash in those first.

Many thanks in advance.

Linton

The problem could be that your personal; pension will have scheme rules dating from the 1990's.  At that time drawdown was not available so many pensions of that age do not support it..  Have you checked that your Aviva pension does support drawdown?  If not you will have to transfer it to a more modern pension, probably a SIPP. 

As what you can do with the pension and how you do it depends on the scheme rules I suggest you talk to Aviva.  I do not think this is a standard situation

dunstonh

1) I’d like to check that I’ve understood how the final bonus fits in. Say the current value without final bonus is £35k (which I understand is fixed, and won’t go down) and the final bonus estimated at £10k (which can go up or down). If I withdraw £4,500, is that 10% of the total fund I.e. including £1k of the final bonus?

Typically, the legacy plans with guaranteed growth rates do not support drawdown.  I did a PG and PM plan transfer just a few weeks ago. Both with GGRs and Aviva stated that drawdown was not an option.    Is yours a PG or PM policy number?

So, your question may not be relevant.

2) Can I choose which units I cash in to draw the income. I have a small number which are not guaranteed to earn 4% bonus, so would, if I could, cash in those first.

refer to answer above.

Kamohoali

Linton said:

The problem could be that your personal; pension will have scheme rules dating from the 1990's.  At that time drawdown was not available so many pensions of that age do not support it..  Have you checked that your Aviva pension does support drawdown?  If not you will have to transfer it to a more modern pension, probably a SIPP. 

As what you can do with the pension and how you do it depends on the scheme rules I suggest you talk to Aviva.  I do not think this is a standard situation

Sorry - I should have said. I spoke to Aviva, and discussed my options. I have the option to drawdown, or to transfer. Because it’s a with-profit and guaranteed 4% regular bonus, my preferred option is as I’ve set out, and is possible.

Thank you for taking the time to reply and offer advice.

Kamohoali

dunstonh said:

1) I’d like to check that I’ve understood how the final bonus fits in. Say the current value without final bonus is £35k (which I understand is fixed, and won’t go down) and the final bonus estimated at £10k (which can go up or down). If I withdraw £4,500, is that 10% of the total fund I.e. including £1k of the final bonus?

Typically, the legacy plans with guaranteed growth rates do not support drawdown.  I did a PG and PM plan transfer just a few weeks ago. Both with GGRs and Aviva stated that drawdown was not an option.    Is yours a PG or PM policy number?

So, your question may not be relevant.

2) Can I choose which units I cash in to draw the income. I have a small number which are not guaranteed to earn 4% bonus, so would, if I could, cash in those first.

refer to answer above.

Sorry - I should have said. I spoke to Aviva, and discussed my options. I have the option to drawdown, or to transfer. Because it’s a with-profit and guaranteed 4% regular bonus, my preferred option is as I’ve set out, and is possible.

Thank you for taking the time to reply and offer advice.