Aviva pension

[twiddlingthumbs69]

I have an aviva pension which I am thinking about changing to a drawdown.

My question is: do I really need an IFA to sort this for me?

I have no other assets/complications that could muddy the waters and I'm not going to take the initial lump sum.

Haven't delved into aviva charges in depth yet but them seem reasonable. No charge per withdrawal etc.

We're not talking large amounts here. I'd be withdrawing £400 a month.

Is it really necessary to get an IFA involved? I don't want to get into a potential upselling etc

No, you don't need an IFA. Aside from asking Aviva directly what your options are, you could also take advantage of your free appointment with pension wise though:
https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

A drawdown is the fund that‘s left after you have taken tax free cash - the other 75% goes into a drawdown fund. If you are not doing that, you will not have a drawdown fund.

@messybutfun you don't have to take your lump sum to make use of a drawdown fund.

Some providers may use different words but essentially they mostly operate the same way. Until you take any benefits from your pension fund, the fund is called uncrystallised, pre-retirement (in the case of Aviva) or just pension.

You can take a taxable withdrawal from your uncrystallised fund, called uncrystallised fund pension lump sum. Of this 75% will be taxable income and 25% will be paid tax-free.

Your remaining fund would still be uncrystallised.

If you only take tax-free cash, it doesn’t need to be the whole amount, three times that amount will be moved into a new fund which is called crystallised, post-retirement or drawdown. This will be the fund that only has taxable income going forward.

I have an Aviva pension, am not taking a lump sum, will draw down and take 25% of my drawn down amount tax free.

Or to get 25% of your pension tax free

Thank you. So in very basic terms the pension pot transfers to what could effectively be called a savings account.
I don't have to take the 25% but I can withdraw a certain amount tax free each month. Assuming none of my income goes above the personal allowance.

If that's the case, would I need to consult an IFA?

I'm just trying to work out why I would need to.

I assume that at the point of moving the pot I would opt for lower risk investments, as I'm nearly at retirement. The other concern would be management fees.

Aviva looks as if their fees are reasonable compared to others.

Has anyone actually done this themselves without taking professional advice?

The big difference between a pension and a savings account is that an increase in value on your pension is not taxed as income, whereas the interest in savings accounts (except ISAs ) is. And of course the value of a pension can fluctuate, including going down. Mine lost a lot of value at the start of the pandemic and Ukraine war.