Aviva 98 Series Personal and Group Personal Pension

thingswerentthisbadinmyday

Hi everyone,

I’m trying to help a close friend understand his options when it comes to drawing some tax free cash from his existing 98 Series PP. I’m not giving advice - just attempting to wade through the plethora of info which Aviva have sent him following a recent phone call.

He’s invested in about 6 funds (I think there are around 30 in total in the 98 Scheme). They are annotated “Series 4” funds.

He wants to do 2 things;

a) withdraw some tax free cash (Aviva have told him he can do this on the 98 scheme), but he wasn’t told how to go about this. Aviva gave useful info about how to switch funds, but not how to withdraw tax free cash. They also confirmed the 98 scheme offered a drawdown option
Does anyone know if he can give the instruction on-line, in writing or whether it needs to be another (long) phone call?
He doesn’t seem to have a cash balance anywhere, so does he need to encash units from some/all of his existing funds and if yes, do the proceeds have to go into another (cash/deposit) fund before being disbursed to his bank account?
If he takes his maximum tax free cash, the balance of his Pension fund will be in Drawdown. Does he have to choose different funds from those he already has? I ask because on reviewing the funds available to him, I see reference to funds called Pathway, 1, 2 ,3 and 4 which state that they are only available for drawdown.

b) At the same time as drawing cash, he’d also like to de-risk his portfolio.
Subject to the reference to Pathway funds, above, could anyone kindly clarify whether fund switches are ‘free’ or whether he’ll have to suffer a bid/offer spread. I’ve tried to answer this from the info available, but am struggling to do so.

Personally, I have my own SIPP (not Aviva) and understand very well how this works. I may be asked to give an opinion as to whether he should stay with the Aviva pension or move to a SIPP. Are there are clear/obvious advantages/disadvantages other than wider fund choice with a SIPP?

And just to say that I have suggested that he should seriously consider meeting with an IFA for professional advice.

Grateful for any help or guidance. If I could phone Aviva and ask the ‘right’ questions on his behalf, then I would do so. But they simply aren’t going to talk to me because of data protection rules.

Thanks

dunstonh

Does anyone know if he can give the instruction on-line, in writing or whether it needs to be another (long) phone call?

Old Aviva plans are by phone.

He doesn’t seem to have a cash balance anywhere, so does he need to encash units from some/all of his existing funds and if yes, do the proceeds have to go into another (cash/deposit) fund before being disbursed to his bank account?

It's a personal pension, not a SIPP.  There is no cash account and no need to sell units in advance.  Aviva Life & Pension plans pre-fund the transactions.  So, not wait in that respect.

If he takes his maximum tax free cash, the balance of his Pension fund will be in Drawdown. Does he have to choose different funds from those he already has? I ask because on reviewing the funds available to him, I see reference to funds called Pathway, 1, 2 ,3 and 4 which state that they are only available for drawdown.

Pathway funds are designed for drawdown.   Effectively very simple options that will never be the best but never be the worst.   They are more about doing no harm rather than doing what is best.  So, ideal for this scenario.

b) At the same time as drawing cash, he’d also like to de-risk his portfolio.
Subject to the reference to Pathway funds, above, could anyone kindly clarify whether fund switches are ‘free’ or whether he’ll have to suffer a bid/offer spread. I’ve tried to answer this from the info available, but am struggling to do so.

Most plans have been free of switching charges for almost 25 years.  However, only Aviva can answer that when talking about a specific plan.

Personally, I have my own SIPP (not Aviva) and understand very well how this works. I may be asked to give an opinion as to whether he should stay with the Aviva pension or move to a SIPP. Are there are clear/obvious advantages/disadvantages other than wider fund choice with a SIPP?

Better FSCS protection with the old plan.  Potentially cheaper or more expensive than a SIPP.  Smaller fund range but a much simpler product with the inability to do something particularly silly.