Please note that the following presentation should
not be regarded as giving any form of financial or investment advice. You should not make your decision on the basis of this presentation alone.
Hi, I’m Caroline.
And I’m Neil, we’re both part of the Aviva Financial Advice team.
We’ve been thinking about some of the common questions we are getting from our customers and wanted to share with you some key things to think about before making decisions in the current difficult times.
It is really important that you think very carefully, do your research and seek guidance or financial advice before rushing into any decisions that might impact your financial wellbeing.
So, Neil… The big question we’d like to address is ‘Can you access your pension now if you have concerns about debt or need extra income?’
The short answer is YES Caroline, as long as you are at least age 55 or suffering from serious ill health and the scheme rules allow it.
However, we would urge you in the first instance to discuss your situation with your finance providers or to whomever you have commitments with, to consider if alternative options may be available to you, for example:
- Re-finance or re-mortgage to lower your repayments
- Negotiate with creditors for better or different terms
- Identify any payment/premium holidays available – Aviva offer them on some products and mortgage providers may consider a 3-month payment holiday for those financially impacted by Coronavirus.
Secondly, you could review your own financial position
- Check your current spending habits and commitments, to identify other non-essential expenditure that you could temporarily cease to ease your position.
- Consider other assets including savings and investments, you could draw on. You should also consider the tax implications of any decisions you make. You may even consider approaching friends and family for support.
Once you have done this, who else can help and support you with your debt issues?
In particular, we’d like to highlight the free help offered by the Citizen’s Advice Bureau. You can find guidance via their website www.citizensadvice.org.uk
The debt and money section on this site highlights key options that may be available to you in this crisis, for example, what to do if you can’t afford to pay your rent and how to request help with other bills. This is an unprecedented time and help is available so please don’t be afraid to ask.
If your income has suffered, maybe you have been furloughed, it is important to seek what state help and support is available whilst circumstances are difficult.
So, Neil, do we agree that after considering these options, accessing a pension plan can be the right decision for some?
It is important not to rush into a decision, so you should take your time to understand and consider all options. It is always wise to seek further guidance, to ensure you make the right decision for your personal circumstances. Some key factors to consider will be:
- There are a number of ways to access your pension so make sure you do your research into your options and understand the tax implications of these.
- Making sure you understand the rules of your specific pension scheme as some pension contracts don’t provide the flexibility some seek.
- As a withdrawal now affects your future wealth- consider how accessing your pension now will impact on your future plans for retirement, by looking at your future income needs and life expectancy.
- Making investment decisions based on short-term volatile market conditions can often prove detrimental in the long-term. ‘particularly if you access your investment when values are low and are subsequently not invested in the market if and when investments start to rise again’. If you’re in any doubt about your likely course of action we’d recommend you seek guidance or financial advice.
So, if you have considered this in detail and want help accessing your plans, how can you achieve this Caroline?
There are a number of ways Aviva customers can proceed here…
You can contact Aviva on our website or by telephone to seek guidance. If financial advice is appropriate, you can speak to your own Financial Adviser or one of our Financial Advisers who can only give advice on Aviva products.
You can contact government services, such as The Money Advice Service and Pension Wise offering free, impartial guidance.
Alternatively, you can seek financial advice, from your own Financial Adviser or from your workplace’s recommended adviser, if you have one, or search for an independent financial adviser on www.unbiased.co.uk.
Thank you Caroline and thank you all for listening and we hope we’ve helped you today.