Lump sum and drawdown not available on held policies

ldk8000

I have two pension pots with Aviva. Now at almost 67, I would like to start withdrawing money from the policies which are described as a defined contribution pension. In January, Aviva sent me a brochure Making sense of your retirement options which refers to the following four options:

1.         Buying an annuity

2.         Taking drawdown

3.         Taking lump sums from your pension pot

4.         Withdraw all your pension pot in one go

I knew I didn’t want to do the last of those and had made up my mind exactly how I wanted to proceed.

I contacted Aviva last Thursday and was told that, with the existing policies, I had only two choices: either withdraw the whole amount (Option 4 above) or transfer one or both policies to another policy which would allow the first three options. First of all, what is the point in sending a brochure containing four choices if, in reality, there are only two, one of which is not even mentioned in the brochure? How can you make a proper decision before contacting Aviva?

Aviva insisted on sending a brochure pack which could take up to 10 working days to arrive, then I can ring with any queries or to arrange a transfer/withdrawal. I need not transfer both amounts nor is it necessary to transfer everything held in one or both pots. However, they have told me separately in writing that they do not offer partial cash withdrawals which seems to suggest that only the total amount of one or both pots can be transferred.

I am now confused about the best way to proceed. The girl at Aviva said that, with the third option above, there is a charge each time you withdraw whereas drawdown normally doesn't attract any charges apart from a 0.25% annual admin charge.

When the policies were started with Sun Life in 1990, all of the paperwork says it is a Personal Pension Plan. Even the most recent paperwork from Aviva is headed “Your pension summary”, “Your pension statement” or “It’s time to check on your pension”. In the following text, it often refers to “your Individual Personal Pension”.

I spoke with Pensionwise a few months ago and they also told me that I would have the four options mentioned above. Although that is not completely untrue, the way it was phrased is misleading as it does not mention the possibility that a transfer to another policy may be necessary, presumably with associated charges.

Marcon

ldk8000 said:

I have two pension pots with Aviva. Now at almost 67, I would like to start withdrawing money from the policies which are described as a defined contribution pension. In January, Aviva sent me a brochure Making sense of your retirement options which refers to the following four options:

1.         Buying an annuity

2.         Taking drawdown

3.         Taking lump sums from your pension pot

4.         Withdraw all your pension pot in one go

I knew I didn’t want to do the last of those and had made up my mind exactly how I wanted to proceed.

I contacted Aviva last Thursday and was told that, with the existing policies, I had only two choices: either withdraw the whole amount (Option 4 above) or transfer one or both policies to another policy which would allow the first three options. First of all, what is the point in sending a brochure containing four choices if, in reality, there are only two, one of which is not even mentioned in the brochure? How can you make a proper decision before contacting Aviva?

Aviva insisted on sending a brochure pack which could take up to 10 working days to arrive, then I can ring with any queries or to arrange a transfer/withdrawal. I need not transfer both amounts nor is it necessary to transfer everything held in one or both pots. However, they have told me separately in writing that they do not offer partial cash withdrawals which seems to suggest that only the total amount of one or both pots can be transferred.

I am now confused about the best way to proceed. The girl at Aviva said that, with the third option above, there is a charge each time you withdraw whereas drawdown normally doesn't attract any charges apart from a 0.25% annual admin charge.

When the policies were started with Sun Life in 1990, all of the paperwork says it is a Personal Pension Plan. Even the most recent paperwork from Aviva is headed “Your pension summary”, “Your pension statement” or “It’s time to check on your pension”. In the following text, it often refers to “your Individual Personal Pension”.

I spoke with Pensionwise a few months ago and they also told me that I would have the four options mentioned above. Although that is not completely untrue, the way it was phrased is misleading as it does not mention the possibility that a transfer to another policy may be necessary, presumably with associated charges.

Old policies don't offer all modern options, for the simple reason the options quite simply didn't exist when the policies were taken out. Of course it's annoying if you were given misleading information in the recent brochure sent to you by a provider and you should complain to Aviva accordingly.

Unless your current plans have 'safeguarded benefits' (some sort of promise such as a guaranteed annuity rate, when you'd need to pay for regulated advice before any transfer could proceed), there shouldn't normally be a charge to transfer to a more modern plan which gives you all the options.

dunstonh

I contacted Aviva last Thursday and was told that, with the existing policies, I had only two choices: either withdraw the whole amount (Option 4 above) or transfer one or both policies to another policy which would allow the first three options. First of all, what is the point in sending a brochure containing four choices if, in reality, there are only two, one of which is not even mentioned in the brochure? How can you make a proper decision before contacting Aviva?

its easy to make a decision before contacting the provider.    What you want to do is not limited by what the provider says unless there are safeguarded benefits.

Aviva has had some issues with a range of AXA Sun Life plans being integrated into their systems, and they are still run on the original AXA software.  

Aviva insisted on sending a brochure pack which could take up to 10 working days to arrive, then I can ring with any queries or to arrange a transfer/withdrawal. I need not transfer both amounts nor is it necessary to transfer everything held in one or both pots. However, they have told me separately in writing that they do not offer partial cash withdrawals which seems to suggest that only the total amount of one or both pots can be transferred.

Either it is what you have written here or you have some confusion. Transferring is not the same as withdrawing.  Withdrawals will either be UFPLS or drawdown.  Transfer is what you want to do to move it to another plan.

  I spoke with Pensionwise a few months ago and they also told me that I would have the four options mentioned above. Although that is not completely untrue, the way it was phrased is misleading as it does not mention the possibility that a transfer to another policy may be necessary, presumably with associated charges.

You have all the options available (including variations not mentioned).    You just need to transfer to a plan that offers the functionality that you require.

Your existing plan is a legacy contract.  you want to do something that was introduced in 2016.   Its normal for legacy plans not to offer some or even all of the modern options.   You just transfer it to one that does.

 Of course it's annoying if you were given misleading information in the recent brochure sent to you by a provider and you should complain to Aviva accordingly.

Aviva's brochures are generic.  As they are required to be.  That is not a failure.     The idea is to let you know what you can do.  Not what the current plan may be limited to.   Their guide does state that some options may not be available on all plans.

xylophone

 Consider a transfer to a SIPP?

For example


https://www.hl.co.uk/investment-services/transferring-your-existing-investments/transfer-now

And book an appointment with Pension Wise.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

https://www.moneysavingexpert.com/savings/cheap-sipps/

Albermarle

It is very easy nowadays to open a new pension online, and arrange a transfer of other pensions into the new one. Some even offer you cashback as an incentive.

The only real issue is that when the money arrives from Aviva it will be in cash, and you will have to decide how to invest it in the new pension.

gm0

To make a transfer you need to pull it to somewhere (like an ISA does).
So you have to pick one to use.  Competitive.  Cashback incentives exist.
Some are focused on cheap.  Some are focused on helpful/digital
And some are better or worse at different things - so it helps to know what you plan to invest in alongside choosing

You often find that investments (funds) in an older employer/personal pension are not retail funds on sale elsewhere today.  And so you can't just move them across (in many cases) as the old won't be there on the new and they cannot (or will not) add them.  Sometimes it is possible - this is called "in specie" transfer as opposed to "cash" 
Mostly they have to be sold to cash (which takes a couple of days to settle and the cash moved (a bit longer)
Then you reinvest that cash - as you chose - in funds you like - on the new platform
But are exposed to the market moving towards or away from you for that few days

And once setup you ask for the drawdown income in whatever fancy post 2016 way you have chosen

ldk8000

Following last week’s replies to my query, I contacted Aviva. The girl on the other end insisted that I had to wait for a brochure to arrive so that I could receive up to date values on the existing policies. This struck me as nonsense as I can find the current values online as I do on a fairly regular basis. Aviva said that, once the brochure has arrived, I can make a decision about what to do. But I have already made that decision: to transfer from two legacy policies to a more advantageous policy with Aviva. I asked how long the transfer would take and was told it would be 3-5 weeks. When I asked why, the reply was to wait for the brochure, then the appropriate team could give me further information. I also asked if there was a charge for the transfer but, again, the answer was to wait for the brochure and to contact the relevant team. I asked if the brochure would be different to the one Aviva had sent in January but the girl repeated the same spiel yet again. I thought this repetition was very unhelpful. I cannot understand why it would take 3-5 weeks to transfer the existing pension pots to a new, better policy with the same provider. Why do I have to wait for a brochure and then 3-5 weeks for the transfer to be actioned? I can understand that there may be documents to sign but, if I already know that I want to transfer to a new policy with the same provider, why can that not be done now before the brochure arrives? And will the brochure be different to the one I already have?

dunstonh

 I cannot understand why it would take 3-5 weeks to transfer the existing pension pots to a new, better policy with the same provider.

Aviva (ex CGNU) plans are some of the quickest to transfer.   Aviva (ex FP) a  little slower and Aviva (ex AXA) are a bit slower than that but still measured in under two weeks.  

The exceptions will be with certain heritage plans with safeguarded benefits or protected tax free cash entitlement that need manual calculations.

What you appear to be getting told is the supply of the retirement pack rather than transferring out.   If you are using Aviva's in-house sales team, then it will be slower.