Aviva launches improved income drawdown solutions

Article date: 10 March 2014

New drawdown makes it easier for customers to choose a pre to post retirement platform

  • Flexible single and phased drawdown offers consumers more retirement choice.
  • Retirement income can be taken in a more tax efficient way.
  • New flexible single and phased solutions allow customers to access funds without Government Actuary’s Department (GAD) limits.
  • Phased solutions help safeguard valuable death benefits.

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% 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% of the funds moved into drawdown are invested.
  • Single drawdown  - allows customers to take 25% of their pension fund up-front as tax-free cash, with the remaining 75% 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 £20,000 per year.

Aviva has a minimum investment amount of £50,000 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 is one of only a few providers to offer 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. Other features include:

Aviva’s income drawdown features


Capped income drawdown

Flexible income drawdown

Minimum  client age

55 years

55 years

Minimum investment amount

£50,000 before taking tax-free cash and any adviser charge.

£50,000 before taking tax-free cash and any adviser charge.

Minimum clients must keep in their pre-retirement account



Payment frequency

Monthly, quarterly, half-yearly or yearly.

Monthly, quarterly, half-yearly, yearly.


£100 annual charge per post-retirement account.

£100 annual charge per post-retirement account.

£200 charge if the combined value in the clients’ pre and post retirement accounts fall below £10,000 due to a single withdrawal during the first 12 months of flexible drawdown starting.

Aviva’s income drawdown solution is offered as part of its Pension Portfolio product, on the Aviva Platform, which provides a simple and efficient way for advisers to manage customers’ investments over time.

The Aviva Platform is growing fast and has just passed the £3 billion 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% has been introduced for new customers with portfolio values of more than £400,000.

Aviva’s drawdown solution offers advisers a range of tools to enable them to assist their customers. Income drawdown calculators help advisers understand how much of their customers’ income can be paid as tax-free cash or as taxable income on a gross and net basis. And the calculators can be used to assess the rate of return customers will need from their investments to maintain their income over a selected period of time.

Clive Bolton, Aviva’s Managing Director of At Retirement, said:

“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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If you are a journalist and would like further information, please contact:

Diane Mangan : Aviva Press Office : 07800 691714 : diane.mangan@aviva.co.uk

Notes to editors:

Aviva provides insurance, savings and investment products to 34 million customers worldwide.

We are the UK’s largest insurer with over 14 million customers and one of Europe’s leading providers of life and general insurance. We combine strong life insurance, general insurance and asset management businesses under one powerful brand. We are committed to serving our customers well in order to build a stronger, sustainable business, which makes a positive contribution to society, and for which our people are proud to work.

We are ranked as one of the UK’s top ten most valuable brands and Aviva Plc is in the top 10% of socially responsible companies globally in the Dow Jones Sustainability World Index.  In 2012 we invested £5.7m into our UK communities. One in three of our employees were involved in community investment activities which included giving nearly 30,000 hours.

Aviva is working in partnership with Railway Children through the Aviva Street to School programme to get children living or working on UK streets back into everyday life, especially education. Find out more at www.aviva.co.uk/street-to-school/

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