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 Income drawdown

Our range of income drawdown options is available through Pension Portfolio on the Aviva Platform. Pension Portfolio offers flexi-access drawdown on a single or phased basis and gives your clients complete flexibility with their pension fund in retirement.

Income drawdown is available through  Pension Portfolio on the Aviva Platform. It gives your clients complete flexibility with their pension fund in retirement.

Available options


  • Flexi-access drawdown
  • Crystallisation –  monthly, quarterly, half yearly and annually
Single flexi-access drawdown Phased flexi-access drawdown

Efficient income withdrawal
We automatically calculate the minimum crystallisation required to provide a required net income - using a combination of taxable and tax-free cash.

N/A

yes

Taxable income
Clients crystallise the minimum amount to pay their chosen income amount. We pay 25% tax-free cash as separate lump sums each time they crystallise some of their funds.

N/A

yes

Non-taxable income 
Clients use their tax-free cash to generate a chosen income amount. The remaining 75% is invested, and clients can take an income from that whenever they need it.

 N/A

yes 

Single drawdown
Clients take 25% of their fund as tax-free cash. The remaining 75% is invested, and used to pay a chosen taxable income amount.

yes

 N/A

Restrictions and charges


Flexi-access drawdown

Min client age

55

Min investment amount

N/A

Min amount clients must move to a post-retirement account for single drawdown

N/A

Ad hoc withdrawals

Yes, via the ad hoc withdrawal route on a gross basis.

Payment frequency 

Monthly, quarterly, half-yearly or yearly

Existing capped drawdown clients

Capped drawdown is no longer available for new clients. But if they were in capped drawdown before 6 April 2015 then they can still stay in it as long as they don't exceed GAD limits. If clients go over these limits they'll automatically move into flexi-access drawdown which will trigger the money purchase annual allowance of £4,000. 

What’s a pre-retirement account?


A pre-retirement account holds clients’ uncrystallised funds.

What’s a post-retirement account?


A post-retirement account holds clients’ crystallised funds.

We use this money to pay clients’ income, so we have to crystallise enough funds into this account to meet clients’ income needs.

We're here to help or you can call for a quote


 For more information, call us on 0800 056 2026.
Lines are open 8.30am to 5.30pm, Monday to Friday.

 Email us at platformservices@aviva.co.uk

Income drawdown isn't suitable for everyone. There are risks and benefits which your clients will need to consider. Clients will depend on you  to adjust their income/tax position.

 Benefits


  • It’s completely flexible. Clients can carry on working and use variable income drawdown to top up their income if, say, their hours drop or there's a need for more funds.
  • Flexi-access drawdown clients can take any amount out of their pension fund, whenever they wish - even all of it.
  • Clients can choose not to take an income at all.
  • The efficient income withdrawal option lets clients use a combination of tax-free and taxable cash, which makes their income more tax-efficient.
  • Clients can choose from a selection of investment options.
  • Clients aren't locked in for life, so they can switch to another retirement income option (such as an enhanced annuity).
  • Clients can choose to leave their remaining pension fund (crystallised or uncrystallised) to any named beneficiary. If the client dies on or after their 75th birthday the beneficiary may have to pay tax on it.
  • We can normally pay death benefits for clients who die before age 75 without any tax charges.
  • Existing capped income drawdown clients have some control over the amount of income they take (subject to GAD limits).

Risks


  • The value of clients’ pension funds can go down as well as up, and may fall to less than the amount they paid in.
  • Clients who select their income amount with the efficient income withdrawal option may not receive the income they requested and their payments can vary from month to month.
  • Investments must grow, if they're going to compensate for the income withdrawn. If that doesn't happen, the pension fund will be depleted – especially if the client takes a high level of income. There's a risk a client could run out of money.
  • Taking income from flexi-access drawdown will trigger the money purchase annual allowance of £4,000.
  • There’s no guarantee that annuity rates will improve in the future. They may fall, which means there's a risk of lower income if your client is using the product to delay buying an annuity.
  • If your client is in capped drawdown post 6 April 2015 they will continue to need GAD reviews every three years up to age 75 and every year afterwards.
  • A small number of clients may need to complete a tax return to reclaim overpaid tax.

 

Passing on pension death benefits


Your clients will be able to pass their pension funds on to named beneficiaries to provide an income or lump sum, and in turn pass them to their named beneficiaries and so on.

For a client who dies aged 75 or over, the beneficiary will pay tax on any benefits taken from the funds at their marginal rate.

For a client who dies under the age of 75 they can pass the funds on tax free as an income or lump sum.

You can also use Pension Portfolio to administer any funds your client may inherit themselves.

Contact us

You can find contact details for each product area in the drop-down list:

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