Aviva pension advice

happymum37

Hello.
Asking advice for him In doors please.

Age - 47

Has 2 aviva pensions . Aiming to retire at 60. Will have a full state pension at 67. We have no debt or mortgage now and save £700 a month ish as we are in desperate need of 2 replacement family cars within the next 5 years max and will buy 2 nearly new cars outright.

Currently paying 12% into pension but up until 4ish years ago it was only about 6% contributions as we just didn't think about his pension and plowed the mortgage away.

So pension 1- now no longer contributing too as previous  employment .
£78000 in it.  Split into 4 separate investment funds . ; a diversified asset fund with risk rating 2/7,
Mixed  investment 0-35 %shares  risk rating 2/7,  my future focus consolidation pre 2024  risk 2/7,  aviva pension property risk 4/7

Current pension paying into
£25k
All in 1 pot - my future focus growth risk rating 4.

So my questions-
 should he consolidate into one pension? 
If so how Would you then split the pot?

We are hoping to increase his payments to make it 14% contributions by the end of the year.

Thanks everyone.

xylophone

will buy 2 nearly new cars outright.

No chance of PX for old cars then interest free deal?  Relative could have paid outright from savings but decided he might as well earn interest and pay  interest free over two years.

With regard to the £700 a month, you could  each use a monthly saver , looking for the best deal each year for maturing funds and then the best monthly saver deal?

https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/

As both pensions are with Aviva, assuming that there is nothing special (GAR for example) about Pension 1, and  you have compared fees, there would seem no good reason for not combining the funds?

happymum37

xylophone said:

will buy 2 nearly new cars outright.

No chance of PX for old cars then interest free deal?  Relative could have paid outright from savings but decided he might as well earn interest and pay  interest free over two years.

With regard to the £700 a month, you could  each use a monthly saver , looking for the best deal each year for amtruing funds and then the best monthly saver deal?

https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/

As both pensions are with Aviva, assuming that there is nothing special (GAR for example) about Pension 1, and  you have compared fees, there would seem no good reason for not combining the funds?

We can't part ex.  Our current cars are scrap value only but running OK so will keep going till they die. Seriously old cars lol. 

Sorry what is GAR please?

We might put them together then split into 3 or 4 different funds within

Thanks for the answer , pensions really stress me out

xylophone

Meant to write maturing not amtruing! I have corrected!


GAR is short for Guaranteed Annuity Rate.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/guaranteed-annuity-rates

FIREDreamer

xylophone said:

As both pensions are with Aviva, assuming that there is nothing special (GAR for example) about Pension 1, and  you have compared fees, there would seem no good reason for not combining the funds?

Unlikely - GAR was usually only available on with profits products. I have only ever seen GAR on a unit linked policy once and even that had to be invested in a very strange notionally priced fund (similar but not the same as unitised with profits).

Albermarle

So pension 1- now no longer contributing too as previous  employment .
£78000 in it.  Split into 4 separate investment funds . ; a diversified asset fund with risk rating 2/7,
Mixed  investment 0-35 %shares  risk rating 2/7,  my future focus consolidation pre 2024  risk 2/7,  aviva pension property risk 4/7

What stands out is that the investment funds are very low risk for a 47 year old. Their growth will be low and may only just about keep up with inflation.

Current pension paying into
£25k
All in 1 pot - my future focus growth risk rating 4.

This fund looks more suitable. It will be a bit more volatile but will hopefully grow a bit faster.

happymum37

Albermarle said:

So pension 1- now no longer contributing too as previous  employment .
£78000 in it.  Split into 4 separate investment funds . ; a diversified asset fund with risk rating 2/7,
Mixed  investment 0-35 %shares  risk rating 2/7,  my future focus consolidation pre 2024  risk 2/7,  aviva pension property risk 4/7

What stands out is that the investment funds are very low risk for a 47 year old. Their growth will be low and may only just about keep up with inflation.

Current pension paying into
£25k
All in 1 pot - my future focus growth risk rating 4.

This fund looks more suitable. It will be a bit more volatile but will hopefully grow a bit faster.

Thank you.  We are very apprehensive when it comes to risk incase we come out with less than we put in 

happymum37

Albermarle said:

So pension 1- now no longer contributing too as previous  employment .
£78000 in it.  Split into 4 separate investment funds . ; a diversified asset fund with risk rating 2/7,
Mixed  investment 0-35 %shares  risk rating 2/7,  my future focus consolidation pre 2024  risk 2/7,  aviva pension property risk 4/7

What stands out is that the investment funds are very low risk for a 47 year old. Their growth will be low and may only just about keep up with inflation.

Current pension paying into
£25k
All in 1 pot - my future focus growth risk rating 4.

This fund looks more suitable. It will be a bit more volatile but will hopefully grow a bit faster.

Would you put both pensions  into 1 pot ?.
We are thinking of merging into 1 pot and having 50k at risk 4
25k risk 3
I 25k risk 2

And ideally getting his contributionsbup to 14% in sept when my pay increase comes in

Thank you again

QrizB

happymum37 said:

Albermarle said:

So pension 1- now no longer contributing too as previous  employment .
£78000 in it.  Split into 4 separate investment funds . ; a diversified asset fund with risk rating 2/7,
Mixed  investment 0-35 %shares  risk rating 2/7,  my future focus consolidation pre 2024  risk 2/7,  aviva pension property risk 4/7

What stands out is that the investment funds are very low risk for a 47 year old. Their growth will be low and may only just about keep up with inflation.

Current pension paying into
£25k
All in 1 pot - my future focus growth risk rating 4.

This fund looks more suitable. It will be a bit more volatile but will hopefully grow a bit faster.

Thank you.  We are very apprehensive when it comes to risk incase we come out with less than we put in 

If you avoid risk, you're guaranteed to end up with less (after inflation) than you put in.

At 47 you've got ~20 years until state pension, then another 20+ years to fund after that. That's a long investment horizon.

happymum37

QrizB said:

happymum37 said:

Albermarle said:

So pension 1- now no longer contributing too as previous  employment .
£78000 in it.  Split into 4 separate investment funds . ; a diversified asset fund with risk rating 2/7,
Mixed  investment 0-35 %shares  risk rating 2/7,  my future focus consolidation pre 2024  risk 2/7,  aviva pension property risk 4/7

What stands out is that the investment funds are very low risk for a 47 year old. Their growth will be low and may only just about keep up with inflation.

Current pension paying into
£25k
All in 1 pot - my future focus growth risk rating 4.

This fund looks more suitable. It will be a bit more volatile but will hopefully grow a bit faster.

Thank you.  We are very apprehensive when it comes to risk incase we come out with less than we put in 

If you avoid risk, you're guaranteed to end up with less (after inflation) than you put in.

At 47 you've got ~20 years until state pension, then another 20+ years to fund after that. That's a long investment horizon.

Thank you

He's leaving work at 60 . If he has to take a hobby job fine but my salary will support us for 5 years till I retire at 60.

So this pot has 13 years of contributions and then ideally will be left a further 5 years till we draw down