Aviva Financial Advice

Frequently asked questions

Financial advice

What are the benefits of financial advice?

Money talks, but that doesn’t mean it speaks in plain English. An adviser will cut through the financial jargon, look at your situation and your goals, and devote their expertise to helping you answer big (and small) financial questions. You’re not normally required by law to get financial advice, but life can certainly be less stressful knowing an adviser has your back.

How much does Aviva financial advice cost?

Your first meeting with Aviva Financial Advice is free. It’ll be used to discuss your financial goals and help you decide if advice is right for you. After that, your adviser will take you through all the charges up front before you decide to proceed.

What is tax relief?

Tax relief can reduce the cost to you of your pension benefits, and/or increase their value, but it's a complex subject on which advice can be useful. The amount of tax relief you get depends on your income. Your adviser will take you through all the ins and outs so you don’t miss out on anything you’re owed.

Tax benefits are dependent on individual circumstances and are subject to change.

Pension advice

Can I afford to retire?

Whether you can afford to retire depends on factors like how much you’ve saved, when you hope to retire, and the lifestyle you’re expecting in retirement. You can get a sense of how much you might need by checking the Retirement Living Standards (RLS), published by the Pensions and Lifetime Savings Association. The RLS gives estimates of what retirement might look like at three different levels of income.

Your adviser will use the Retirement Living Standards in conversations with you. They’ll also use a type of forecasting called cashflow modelling to help you see the best ways of using your pension and investments to support your retirement.

What’s the difference between a defined benefit (DB) pension and a defined contribution (DC) pension?

A defined benefit (DB) pension – sometimes called a final salary pension – pays a retirement income based on your salary and how long you have been/were an active member of your employer’s DB scheme. Defined benefit pensions are most common in the public sector and older workplace schemes. A tax-free lump sum will usually also be available. In some schemes, you will give up some of your income to pay for a lump sum.

A defined contribution pension lets you build up a pension pot that provides a retirement income based on how much you and your employer contribute and how much this contribution grows. Up to a quarter of the pot can usually be taken as a tax-free lump sum, though this would reduce the amount available for your retirement income. The value of a pension pot can go down as well as up.

Do I need a financial adviser for my pension?

In most cases, you don’t need to get an adviser by law, but deciding how to save for retirement is a complex decision. Also, some decisions, like whether to start taking an income from your pension, can never be unmade. That’s why personalised advice from a qualified adviser can bring real relief. 

The Financial Conduct Authority (FCA) requires you to take financial advice before transferring if the Cash Equivalent Transfer Value (CETV) of your defined benefit (DB) pension is over £30,000.

MoneyHelper is a free financial guidance service backed by the Government. It’s there to help you understand your pension and other finances, but it can’t give you personalised advice – for that, you’ll need a qualified adviser.

Am I paying enough into my pension?

Simply put, you should put as much into your pension as you need to meet your goals. Your adviser will take the time to find out what you really want from retirement and where you’re at right now. Then they’ll tell you whether you’re on track to reach your goals and advise on what to do if not.

Should I consolidate my pensions?

If you have several pensions, there are both upsides and downsides to nesting them in a single place. That’s why we’d recommend talking to a financial adviser before you consolidate your pensions. They’ll explain all the possible outcomes of your decision and help you understand whether consolidating is what’s best for you.

What happens to my pension when I die?

You might have heard that when you die your pension just disappears. Luckily, that’s not true. In most cases, you can choose someone who relies on you for financial support (known as a dependent) to be paid a fixed amount of your pension, but you’ll likely have other options too. Aviva Financial Advice will help you understand your situation and prepare for the future— whether that’s tomorrow or the year twenty one hundred.

Do I need financial advice to transfer a pension?

If you have a defined contribution (DC) pension, you can legally transfer it without a financial adviser. However, your adviser can talk you through all the implications of a transfer. For example, some defined contribution pensions come with benefits like promised minimum rates and additional death benefits that you could lose if you transfer.

If you have a defined benefit pension that is worth more than £30,000 you are required by law to get advice.

When do I get the state pension?

You can currently get your State Pension at age 66. But that age will gradually increase for people born after 5th April 1960.

The amount you get depends on your National Insurance record. Aviva Financial Advice can help you get as much as you’re entitled to. They can also help you make up for any gaps in your national insurance contributions.

How much tax-free cash can I take from my pension and when?

Currently you can take 25% of most DC pensions as tax-free cash whenever you choose, once you reach age 55. From April 6th 2028 this will be age 57. You might be tempted to take the full amount as soon as you can. Your adviser can explain the potential drawbacks of that approach and suggest some more tax-efficient ways of managing your wealth.

What is the pension annual allowance?

The pension annual allowance is the total amount you can grow in your pension pot before you have to pay tax. The annual allowance is currently £60,000.

Annual allowance is measured differently for defined benefit (DB)- and defined contribution (DC) pension schemes. For defined benefit pensions, it’s measured according to how much your pension grows over the tax year. Your adviser can help you make sure you’re contributing to your pension in the most tax-efficient way. For defined contribution (money purchase) pensions, it’s set at the total of your and your employer’s contributions.

Tax benefits are dependent on individual circumstances and are subject to change.

Can I start a pension for my child or grandchild?

Yes, you can start a pension for your children or grandchildren if you’re their legal guardian. Your adviser can guide you through your options, help you set up a pension, and start making contributions.

Tax benefits are dependent on your child's or grandchild's circumstances and are subject to change.

Defined Benefit (DB) advice

What is a defined benefit (DB) pension transfer?

A defined benefit transfer is when your defined benefit (DB) pension is transferred to a defined contribution (DC) pension. Transferring means exchanging the guaranteed annual income of a defined benefit pension for the investment potential and flexibility of a defined contribution pension.

The value of investments can go down as well as up, so you could get back less than is transferred.

Will my adviser recommend a direct benefit (DB) pension transfer?

Whether your adviser recommends a defined benefit pension transfer will depend on your financial situation and retirement goals. In some cases, transferring could be the best option. In others, remaining or transferring to a blended option might serve you better. Whatever they recommend, they’ll lay out the whole picture, including the risks and downsides of transferring that you might not be aware of.

What is abridged advice and how can it help me with a direct benefit (DB) transfer?

Abridged advice is the first phase of defined benefit advice, it is where some initial analysis is undertaken to see if it's obvious that you should keep your defined benefit pension as it is.

If the abridged advice outcome is unclear, you could proceed on to full defined benefit advice and the abridged fee is not charged as this is included in the overall DB advice fee. If you’re interested in transferring your defined benefit pension, an adviser will always take you through an abridged advice phase first, as a stepping stone to full advice.

Will I still pay an advice fee if my adviser recommends against transferring my defined benefit (DB) pension?

If your adviser recommends against transferring your defined benefit pension because they don’t believe it’s in your interests, the advice fee is still payable. 

Whatever they recommend, your adviser will have looked through your case with the finest-toothed comb. If they recommend you keep your defined benefit pension instead of transferring, we’re confident their advice is well worth your money.

Are keeping or transferring my defined benefit (DB) pension the only options open to me?

Not necessarily. Other options, like transferring part of your pension, might be a better fit. Your adviser will talk through all the possibilities and recommend whatever they think is best for you.

Investments questions

Am I invested in the right funds?

Everyone’s financial goals are different, so it’s hard to choose your funds based on stock advice. Your adviser will look at your situation and help you decide which funds work best for you. You can also empower yourself to make decisions with our range of tools and calculators.

Why have my funds dropped in value?

Your investments and pensions are typically invested in company shares (equities) and fixed income assets (government and corporate bonds). In general, company shares are held to provide capital growth in your investments over the longer term. It’s important to note that the performance of company shares is linked to the performance of the stock market which can go through periods of volatility. This can cause the overall value of your funds to drop in the short term.

Fixed income assets include government and corporate bonds, which are loans issued by the government (government bonds) and loans issued by companies (corporate bonds) to raise financing in the financial markets. Bonds carry interest rate risk which means that the price of these assets will fall when interest rates go up. Bonds have traditionally shown lower levels of volatility than company shares.