A good time to do nothing?

Stoodles

We are a couple, about 5 years into retirement, anticipating another 30 years.

I was planning to move a circa £200k private pension plan from an old Aviva with profits to II to facilitate drawdown, and take the tax free 25% to fund extensive work on the house. The rest of this pot is intended to fund lumps of discretionary spending - new car etc

Then I woke up this morning thinking "Perhaps this would be a good time to go to cash with a bigger chunk of the various pensions" However it looks as though everyone else had that thought today as well, so I'm back to watching what happens and trusting it will all be OK when Trump goes away in ten years time.

But I'm arguing with myself about whether this is the right time to come out of the With Profits, which I've always viewed as a stabiliser on our portfolios. On one hand, I think I should stay with it for a bit longer, but I also think I should stick to a carefully thought out plan, and that there is a risk that if I wait Aviva will apply a Market Value Reduction.

What would you do?

Marcon

What would you do?

But nobody here IS you, so what anyone answering would do isn't going to reflect your attitude to risk, take into account what other savings you have for retirement etc etc. In short, not really going to be any help to you!

On one hand, I think I should stay with it for a bit longer, but I also think I should stick to a carefully thought out plan, and that there is a risk that if I wait Aviva will apply a Market Value Reduction.

Life has a habit of getting in the way of the best thought out plans, which is where a combination of compromise and reality need to sneak in. Is a partial transfer an option? If Aviva do apply a MVR, could you ride it out using other funds until that MVR is either reduced or removed?

Vitor

I wouldn't let TDS guide my retirement planning. I’d make it an Aviva-policy-terms decision.

Before transferring, I’d get Aviva to confirm in writing the current transfer value, whether any MVR applies, whether a final bonus is included, and whether the policy has any valuable legacy features such as GAR or protected tax-free cash. With-profits is not just ‘another fund’, so once you transfer those features are gone. If the exit terms are clean, then transferring for drawdown flexibility may be fine. But I still wouldn’t move a big chunk to cash just because markets are jumpy today. I’d only hold in cash the bit I expect to spend in the near term, such as the house works and other known withdrawals

leosayer

How careful has your planning been if you are reconsidering it following a relatively minor market drop? Global equities are only back to where they were in September last year.

The bigger question is how your long term retirement income needs will be met after any short-term changes that you make.

Albermarle

Of course I can not be sure, but it seems unlikely an MVR will be applied, as despite recent drops, markets are still ahead by a decent margin, over the last 12 months.

Aylesbury_Duck

I'm in the process of a protracted transfer from an old Aviva plan (with a with-profits element) to an Aviva SIPP. I got written confirmation in November of what the bonus would be and that no MVR applied at that time. I pulled the trigger in early January and again they confirmed no MVR would apply. Aviva got themselves in a right mess and the transfer only started last week but they again confirmed that no MVR would apply. As I understand it, you can instruct them to pause any transfer should the MVR situation change once the process has started. That's what they told me, anyway.