I have an AVIVA pension from being contracted out of SERPS for some years. It was previously a Norwich Union policy.
I am 55 this year and looking at consolidating my pensions from this one and several DC pension accounts from various employers.
The AVIVA pension is currently in 2 funds:
- AVIVA with profits (45%),
- AVIVA with profits guaranteed (55%)
Both funds look to be about 60% equity and AVIVA give them a risk rating of 2 (it seems low to me for that allocation..).
About 33% of the policy transfer value is in the form of a "final bonus" which is not guaranteed and could be subject to a market value reduction (I have seen this on previous years statements but one is not currently applied).
The funds also have bonus rates for which AVIVA provide the following data:
The current regular bonus rate for the Av With-Profit Fund is 2.25%. This is
allowed for in the unit price.
The current regular bonus rate for the Av With-Profit Guaranteed Fund is 4.00%.
This is allowed for in the unit price.
Between 19 December 2016 and 31 December 2016, the regular bonus rate of
the Av With-ProfitFund was 2.75%.
The regular bonus rate will not go below a minimum of 4.00% for the
With-Profit Guaranteed Fund.
This policy represents about 18% of my pension funds (I have other policies) and 8% of my total stash earmarked for retirement (I have ISAs, cash, property and investments in taxable accounts outside my pensions).
My plan is to consolidate my pensions into 2-3 accounts for platform diversity (from 8 currently held) and use draw down for these in retirement.
I am planning not to consolidate this AVIVA policy into my HL SIPP though as the bonus rates look good to me and I can leave this plan to accumulate and consider converting to an annuity when I am older in my 60s. My only concern is the loss or reduction of the final bonus due to adverse market conditions.
Any thoughts for or against consolidating the AVIVA plan or experience with this sort of thing would be gratefully received!