Aviva pension terminal bonus

redcottage

I have held my pension for 40 yrs and am now looking at cashing it in. However the terminal bonus has been reduced significantly every year for the last 5 years despite reasonable market conditions resulting in an overall return less than had I put it in a savings account. Can anyone explain the rationale? I have contacted Aviva but they are being rather evasive.

Mark_d

It depends very much on how your pension was invested.  You can't see this.  If I were you I'd take financial advice as to whether you should be cashing it in now.

Albermarle

The fund will most likely be a mixture of equities ( shares) and bonds/ gilts.

Whilst equities have performed well over the last 5 years, bonds/gilts had a massive crash in 2022? that they have only recovered from a little. 

dunstonh

However the terminal bonus has been reduced significantly every year for the last 5 years despite reasonable market conditions resulting in an overall return less than had I put it in a savings account. 

Equities have had a good 5 years but bonds have had a torrid 5 years and gilts, in particular have had their worst period in 100 years.

If you have safeguarded benefits (such as guaranteed annuity rate or guaranteed minimum maturity value) then the value of the plan is in those and not a final bonus.   Do you have any safeguarded benefits?