Coronavirus: pensions and investments

Uncertainty can cause volatility in investment markets. This is to be expected. And it can result in higher than normal movements in the values of investments – down and up.

As uncertainty eases it’s typically expected that market volatility will ease too. Aviva’s Head of Savings and Retirement, Alistair McQueen, says, “It’s best to keep calm in situations like this. Aviva’s products are designed for the longer term, and this needs to be taken into account when considering changes to your policy. Investment decisions made in haste are rarely good ones.”

If you wish to make changes to your policy, we recommend you speak to a financial adviser. If you don’t have an adviser, you can find one at Unbiased.co.uk.

You can also get help from these government services:

Pension Wise is specifically for people over 50 with a defined contribution pension who are considering withdrawing money from it (at any time from age 55 onwards)

The Money Advice Service provides guidance about all issues to do with money, for all ages

The Pensions Advisory Service provides pensions guidance for all ages.

If you have been planning your retirement for some time, then you are likely to have considered your options a while ago based on the circumstances at that time. You may therefore wish to reconsider whether now is still the right time for you to take your benefits. It’s important to look at what other choices you have, including other potential income available to you, so that you can make an informed decision. Pension Wise is a free, independent government guidance service that can help you make the right decision – you can book an appointment with them here. 

More general considerations are contained in an article you can find here.

You can only access your pension savings if you’re aged over 55, or if you’re suffering from serious illness that impacts your ability to work in the future, or which means your life expectancy is limited to less than 12 months.

There are a number of things to think about when considering taking your benefits. Pension Wise is a free, independent government guidance service that can help you make the right decision. You can book an appointment here.

If you’ve asked to withdraw money from your pension and we’ve received forms or an online application, we will first check your pension value for that day. If your pension value has dropped more than 10% since the date of your quote, we’ll contact you to confirm if you want us to still make the payment.

Yes, you can still switch funds, but before you make any changes to your investments, we recommend that you have a look at what Aviva’s Head of Savings and Retirement, Alistair McQueen, has to say on investing at this time.

We recommend you consider taking financial advice before making any decisions about your investments.  Your policy offers a range of different funds you can invest in. If you have access to MyAviva you can use it to track the performance of your funds and depending on your policy, you may be able to switch investments online.

Typically, there should be no fee for switching. However, different funds can have different charges, and some may be more or less expensive than others. Each fund has a fact sheet explaining its investment objectives and charges.

This may be a scam which could leave you without access to your benefits, excessive charges and a hefty tax bill. You can read our article to find out more information on how to spot a scam.

We understand that the current situation has placed increased pressure on family finances, and many people are looking for ways to ease this in the short term. We’d recommend that you look at the guidance from the Money and Pensions Service before making any decision about reducing your pension contributions.

If you have an individual pension you can stop your contributions at any time. Before you do so, it might be worth considering the impact that stopping contributions will have on your retirement plans, and how you might be able to make up those contributions in the future. You should be aware that paying contributions later may mean you have to pay in more, to make up for lost investment growth.

If you’re in a workplace pension, you can stop your contributions by telling your employer that this is what you want to do. This will usually mean that employer contributions will stop too. Your employer may let you take a ‘contribution holiday’ which means you can set a date when contributions will automatically start again, but not every employer offers this.

We recommend that you set a reminder to opt back into your workplace scheme. If you forget to do this you could miss out on a significant amount in employer contributions, which won’t usually be backdated. This could mean you have to pay in more, or keep working for longer, to achieve the same standard of living in retirement.

For both individual and workplace pensions, remember too that by stopping your contributions you’ll also be losing out on the tax relief you get when you pay into a pension.

If you’re unsure whether stopping contributions is the right thing to do, we’d recommend you take financial advice before making a decision.

If you have an individual pension, you can reduce your contributions at any time.

If you’re in a workplace pension, you may be able to reduce your own contributions – though you should remember that some schemes do have a minimum contribution level. Bear in mind that if you do this, it could reduce or stop contributions from your employer too. All of this depends on your employer’s scheme and your personal situation – so if you’re considering reducing your contributions, start by speaking to your employer.

Before you make any changes to what you pay in, it’s worth thinking about the impact lower contributions will have on your retirement plans, and how you might be able to make up the difference in the future. Aviva has a range of online tools that can help with this, depending on the type of pension you have.

If you’re unsure whether reducing contributions is the right thing to do, we’d recommend you take financial advice before making a decision.

Yes, we will continue to pay your annuity as normal, as per your policy’s terms and conditions.

It may be that the value of your pension pot has fallen in recent weeks as a result of market downturns. While the value of your benefits may recover, you may wish to reconsider whether you should reduce the level of income you take while your fund value is reduced.

This is an area where a financial adviser should be able to help you make a decision. If you don’t have an adviser, you can find one here.

Yes, if you trigger automatic enrolment, for example if you turn age 22, or if you were a new hire in February you will be assessed for automatic enrolment. If your earnings while furloughed are more than £833 per month or £192 per week your employer should automatically enrol you into the workplace pension scheme.

No. Whether or not you’re already receiving your State Pension, your entitlement isn’t linked to stock markets.  

We’ve been in this industry for over 300 years, so we’re well versed in weathering financial storms and crises. We’ve applied all that experience to the current situation. We’re watching it closely, but as an organisation we’re financially strong. As of December 2019, we have a significant capital surplus of £12.6 billion.

We are also overseen by – and working closely with - our regulators. The Prudential Regulation Authority is there to ensure we remain financially strong, while the Financial Conduct Authority (FCA) is there to ensure customers’ interests are protected. We’re also working with the Pensions Regulator to ensure compliance with their regulations too.

Aviva serves over 30 million customers around the world. Our strong financial position, together with our business resilience and risk-reduction strategies, means we’re very confident in our ability to keep meeting our commitments to you, our customers.

As the coronavirus outbreak continues, we’re doing all we can to support you while keeping our people safe. We’ve moved people to working from home in most cases, but with fewer colleagues on hand due to illness or caring responsibilities we can’t speak to as many customers as we’d like and we may be taking a little longer than usual to reply to letters and emails. But we’re pleased to say that generally our service levels are being maintained.

If you use our online investment service, please note we’ve had to make the difficult decision to close our online investment service phone line and cannot process any postal correspondence at the moment. Instead, you can contact us by email at myinvestmentportfolio@aviva.com and we’ll respond as quickly as we can.

For workplace pension customers, our telephone lines remain open. Our contact centre hours have been reduced as you might expect, and while we extend our technology capability to enable more of our colleagues to handle calls from home, we’re asking customers to email us if they’re able to. This will free up our helpline staff to help more vulnerable customers or those with urgent needs.

Thank you for your patience and understanding in these exceptional circumstances.

Aviva’s Head of Savings and Retirement, Alistair McQueen, has put together a list of actions you may want to consider to help keep calm in times of market volatility. Read Alistair’s tips or watch via video.