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

As an employer, you know how important a pension is. As the money your employees will live on when they retire, it’s a significant part of a workplace benefits package.

With contributions from you and your employees, plus tax relief from the government, each of your employees will soon start to see their pension pot building up. But what happens when they retire? How does your workforce turn their pension pot into money in their pocket?

Taking money from a pension is a personal choice

As with most things, a one-size-fits-all approach isn’t right when it comes to taking money from a pension. Everyone approaches retirement differently and many people are in different financial situations. That’s why it’s important your employees can choose how to take their money.

With an Aviva pension, they get full flexibility to do what they like with their money when they retire. We’ve built all the pension freedoms into your workplace pension, so your people can take advantage of any of them any time after their 55th birthday. 

In practice, that means they can:

  • take all their money in one lump sum
  • take 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 is a guaranteed income for life.

Your employees can also choose to mix and match these options, perhaps taking a lump sum and taking an income, either through income drawdown or an annuity.

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

Some people may initially choose to take only their tax-free cash entitlement, leaving the rest of their pot in place to benefit from potential investment growth. Others may choose to take an income from their pension, which they can do without having to move their money to another financial product.

Giving your employees peace of mind

As you know, with your workplace pension scheme, your employees benefit from the group charge for the workplace pension, which is lower than individual pension charges. Once they start taking money from their pension, they’ll keep the lower charge.

Plus, your workplace pension scheme comes under the watchful eye of our Independent Governance Committee. This means you and your employees can rest easy knowing this group of independent experts is making sure the scheme ticks all the regulatory boxes it should.

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. 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. Unlike a pension, a stocks and shares ISA  offers your employees access to their cash quickly and easily as it’s not locked-in until a certain age. It’s also a tax-efficient way to build up a pot of money, although it’s restricted to the limit set every year by the government.

For some employees, equity release might be an attractive proposition. This is where you can unlock cash from your property without having to move. It’s a big decision and your employees will need to speak to an equity release adviser to get the full picture. It will need careful thought as it will reduce the amount of inheritance they can leave behind. It may also affect their tax position. 

Helping your employees prepare for life after work

As an employer, you know how important it is to help your workforce prepare for life after work. The more you can help educate them about their choices, the better. 

If your employees understand more about why making financial preparations for retirement is important, they are likely to become more engaged with their pension. This will also give them a greater appreciation of the benefits package you give them.

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