Guided Retirement explained
Guided Retirement works by dividing your members’ money into three pots. Each pot is designed to meet a different income need, with its own investment approach to support this.
Having this framework in place gives members a clear path forward and could help break down some of the uncertainty they may have about using their pension as an income. They may feel more reassured about their plans, and better supported throughout their retirement.
Taking 25% as a tax-free lump sum
Before splitting the pension money between the three pots, members have the option to take up to 25% as a tax-free lump sum.
1. The Flexible Income Pot
Provides a flexible income in the early years through income drawdown.
In the early years of retirement, members may make home improvements, travel, or work part time and transition into retirement more gradually. Income drawdown allows them to make regular flexible withdrawals according to their needs, with tools available from Aviva to help this last until the later years.
2. The Guaranteed Income Pot
Provides a guaranteed income in the later years, through the purchase of an annuity.
The money that members choose to put in this pot is invested and designed to provide them with the means to buy an annuity in their later years. Members choose the age when they want to buy an annuity when they enter Guided Retirement but they can change it at a later date, to suit changing retirement needs.
3. The Occasional Spending Pot
Not everything can be planned for, so this optional pot could provide for any unforeseen expenses during both phases of retirement.
Whether it's a broken boiler, increased bills, or even a trip away, your members can choose to have funds set aside to use when needed.
Ongoing guidance and support
With Guided Retirement, your members don't have to go it alone. We support them along the way with clear, straightforward information and online tools to help them decide what to do.
Our Guided Retirement modeller tool helps members to see the impact of making changes before they commit to them. They can model the effect of changing the amounts allocated to each of the three pots.
See how it works for yourself
Putting the right pieces in place for your employees' financial future
Transcript for video How can I make my pension pot last throughout retirement?
How can I make my pension pot last throughout retirement?
Aviva’s 2024 Working Lives Report found that this was a question 60% of employees are asking.
And 75% say they want more support from their employer on planning for a comfortable retirement.
And what members choose at the start of retirement might not be right further down the line.
Aviva heard this loud and clear – and that’s why we developed Guided Retirement.
It’s a new solution to help members make the most of their pension savings... and feel that they’re not alone when making decisions…not just at the time they retire, but all through the changing phases of retirement itself.
Guided Retirement does this by dividing their pension money into three pots.
The Flexible Income Pot provides a regular income that the member can tailor to suit their new lifestyle. They may be making the most of their new-found freedom, spending more on travel and hobbies or adjusting to part-time work.
At this stage, they may not be sure how much they’ll need to spend, so income flexibility really matters.
The Guaranteed Income Pot provides the security of a guaranteed income in the later years, though buying an annuity.
It aims to grow its value while the member is taking an income from the Flexible Income Pot.
Members can also choose to have an Occasional Spending Pot, so they’ve got a bit extra for one off expenses throughout both phases of retirement.
But how much to put in each pot? When to switch between them? And how to help make sure the money will last?
Our Guided Retirement Modeller helps members so they aren’t on their own with decisions like these.
That’s the Guided part of Guided Retirement.
Members can create a forecast online, so they can test how splitting different amounts between the three pots could affect their future income.
Support to learn more about retirement options is only ever a step away.
They can model the pot splits any number of times until they reach one that suits their needs. And they can go back and use the Modeller throughout their retirement to try out different splits and amounts.
Then, when they’re happy, they tell us and we’ll allocate the money to the relevant pots.
Like other investments, the value can go down as well as up, and the amount they’ll get back can’t be guaranteed.
We will continue to support members through their retirement journey.
That’s how Guided Retirement helps members plan for, and then enjoy, their retirement with more confidence about the future.
Explore our website to see how Guided Retirement could work for your members.
Support for your members at retirement, and in retirement.
It takes Aviva.
Our Guided Retirement solution is at the heart of our market leading proposition
Best Provider Decumulation Proposition
The framework for Guided Retirement took centre stage in Aviva’s successful submission for this major award. Corporate Adviser recognised our commitment to developing innovative, member-focused solutions.
Pensions Age At Retirement Solutions Provider of the Year
For the award submission based on Guided Retirement we were commended for our leadership in the at-retirement space, demonstrating a clear passion for innovation, excellence and member support.
The need for Guided Retirement
Retirement has changed, so retirement solutions have to change with it. But knowing you've made the right decisions isn't always easy.
In the 2024 Aviva Working Lives Report we found that three-quarters (75%) of members want more support and guidance from their employer about planning for a financially comfortable retirement. Many of those wanted more information on how to make their pension pot last throughout retirement .
Four out of five members (80%) said they do not have a financial adviser to help with retirement planning, but over a quarter (28%) are not confident planning for a financially comfortable retirement. Many are worried about not being able to afford the basics when they’re retired, and are concerned they may not make the right choices to ensure their pensions last for the rest of their life.
Pensions have evolved
Working longer
How Guided Retirement benefits your business and your members
Guided Retirement helps members to improve their financial wellbeing, enhancing motivation and the business's recruitment and retention strengths.
A potential boost in motivation
About a third (35%) of members do not feel their pension will provide enough for a comfortable retirement Footnote [3] . Having confidence in their retirement plans can be motivational if they feel happy with the benefits they receive, and confident about their financial future.
Retirement planning support for members
Our Working Lives report showed that 85% of employers feel responsible for making their scheme members save for an adequate retirement Footnote [3]. And it’s important to ensure that the decisions made at retirement help make the most of funds which have been built up with the employer's support. Aviva’s Guided Retirement solution provides a structured retirement income plan helping members get the most from their pension pot during retirement.
An enhanced rewards package
An attractive workplace pension scheme can improve the overall quality of the package you offer, with clear benefits to employers wanting to boost recruitment and retention.
Easy for members to find out more
Members who are interested in exploring Guided Retirement can visit our dedicated member page, or log in to MyAviva or MyWorkplace.
These are our secure online portals where members can access tools to help them plan and model their retirement.
Fresh insight to support your business
We offer solutions for different sizes and types of businesses, and a range of benefits and tools to help your members improve their wellbeing.
