Aviva launches improved income drawdown solutions
Aviva has remodelled its drawdown proposition to offer customers a range of cost-effective options on a flexible as well as a capped basis, and available on the Aviva Platform.
The drawdown improvements complement Aviva’s expertise in the retirement market with offerings also including annuities and equity release, as well as its savings and pension products.
This enables Aviva to support customers across the wealth spectrum, through a variety of major financial decisions, pre and post retirement.
Options included in Aviva’s income drawdown include:
Efficient income withdrawal – the amount the customer needs to crystallise for each payment is automatically calculated, enabling them to take their income in a more tax efficient way.
Taxable income – customers can crystallise the minimum amount needed for their income payment, and can also benefit from 25 per cent tax-free cash as separate lump sums every time an amount is crystallised.
Non-taxable income – tax-free cash is used to generate the customer’s chosen income amount and the remaining 75 per cent of the funds moved into drawdown are invested.
Single drawdown – allows customers to take 25 per cent of their pension fund up-front as tax-free cash, with the remaining 75 per cent being invested and used to pay their chosen taxable income amount.
Capped and flexible income drawdown work in similar ways, but the flexible solution allows customers to take any income amount they wish within their available funds - free of GAD limits. To benefit from this increased flexibility, customers must confirm they meet flexible drawdown requirements, including a secure minimum income of GBP20,000 per year.
Aviva has a minimum investment amount of GBP50,000 on its drawdown, before taking tax-free cash and any adviser charge, and payments can be tailored to customers’ needs (within GAD rates for capped drawdown). Aviva offers phased drawdown on a monthly basis with the additional ability to select a gross or net income in some instances, and all with an automated approach.
Aviva’s income drawdown solution is offered as part of its Pension Portfolio product, on the Aviva Platform.
The Aviva Platform has just passed the GBP3bn funds under management milestone and has revised its pricing tiers to provide a more attractive proposition for customers planning for retirement. A reduced pricing tier of 0.15 per cent has been introduced for new customers with portfolio values of more than GBP400,000.
Clive Bolton, Aviva’s managing director of at retirement, says: “Aviva has remodelled its income drawdown solution to ensure customers have greater choice and more flexibility in how they take their retirement income.
“It is essential that our industry continues to develop competitive and good value retirement income products, such as flexible and capped drawdown. For those willing to accept some investment risk, income drawdown can offer tax efficient options, and a level of flexibility that enables them to adjust their payments when they need to. But at the same time, they can also keep some of their pension fund invested, and protect their valuable death benefits.
“We’re likely to see customers increasingly turning to advisers for help in making these critical decisions around how to maximise their retirement income over the remainder of their lives. That’s why we have developed useful calculator tools to assist advisers.”
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