Taking your employees from work to retirement with an Aviva workplace pension

As an employer, you know how important a pension is. For your employees, it’s the money they will live on once they decide to stop working. And for most employers, it’s a significant part of their benefit spend.

 Contributions from you and your employees, tax relief from the government, and investment growth all combine to build up a pension pot for each employee. But what happens when they retire? How does your workforce turn their pension pot into money in their pocket?

 The freedom to choose how to take money from their pension

Everyone has different ideas, hopes and expectations about retirement and what it will look like for them. 

Your Aviva workplace pension gives your people the freedom to take their money in whichever way works best for them individually. 

They can:

  • take all their money in one lump sum, part of which will be tax free 
  • take only part of their money as tax-free cash
  • withdraw money regularly or as and when they need it
  • use their pension pot to buy an annuity, which gives a guaranteed income for life.

And, if they want to, they can choose to mix and match these options. 

Some might take all or some of their tax-free lump sum entitlement as cash and place the taxable part of their pot into drawdown to access when they need a replacement income. 

Others may choose to take the whole of their pot as a lump sum or to buy an annuity to get a guaranteed income for life.   

Value for money and peace of mind

Charges for workplace pensions are often lower than those your employees would pay through an individual pension. And once they start taking money from their pension, they’ll keep the same low charge.

Plus, your workplace pension scheme comes under the watchful eye of trustees or our Independent Governance Committee. This means you and your employees can sleep easy knowing independent experts are making sure the scheme offers good value for your employees.

What if your employees want more money for their retirement?

A pension is the best way to save for retirement – it’s tax efficient and designed specifically for long-term investment. But that doesn’t mean it’s the only way to fund a retirement. Some of your employees may want to think of alternative or supplementary ways to pay for their retirement. 

One way is to set up a stocks and shares ISA and build up a nest egg in this way.. Employees  can  take money out of  a stocks and shares ISA at any age. And it’s also a tax-efficient way to build up a pot of money. Although there’s no tax relief on contributions when they’re paid in, investment growth and withdrawals are both tax free.

For older employees, equity release where they can unlock cash from their property without having to move might be an attractive proposition. It’s a big decision and usually only available to those aged 55 and over. Your employees will need to speak to an equity release adviser to find out how it will impact their estate on death, their tax position, and their eligibility for means-tested benefits. 

Helping your employees make good decisions

Making good decisions at retirement can help your employees maximise the value of a lifetime of pension saving. 

It isn’t always easy to get those decisions right, so the more you can help your workforce understand their choices, the better. Employees who understand more about the importance of preparing for retirement may also better appreciate the value of the benefits package you provide.

Explore Business perspectives

Your hub for expert insight and knowledge

Featured articles