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Aviva Pension Review

as of 30/03/2021 at 1:01 pm

Our View

This is an OK option for investors or pensions savers who don’t want too much detail, minimum fuss and a big solid brand behind the scenes. If you have insurance with Aviva, you can see this on one convenient dashboard with any ISAs and pensions. One of the better big traditional players for pensions. Probably best for those who don’t want to do anything fancy.

Our Pension Rating

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We score each provider on about 20 different criteria including cost, service, website, functionality, customer feedback and our experience of the service. All overseen by our PhD gonk!

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Recommended For

Beginner Investor

In a nutshell

Big, trusted company

Simple pre-packaged options

Bland but safe

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You Say

Your overall rating

How Your Ratings Work

Don’t want to take our word for it? We ask existing customers and investors to rate their experience with the company – based on value for money, overall service and the website. We need at least 20 customer reviews before we add anyone to our Best Buys list.

Based on 45 reviews

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Not the provider you wanted to review? Please contact us at bestbuys@boringmoney.co.uk if you would like to propose an ISA or pension provider for us to add.


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We love customer reviews because it’s the only way we can check the user experience across a meaningful sample of independent people. We collect all of your reviews and use them to calculate the overall “You Say” score for each provider. We also use this customer rating in our analysis, to make sure we’re not rewarding companies which look good online but fail to deliver in practice. Finally we use the aggregated data in our research and consultancy with providers, so we can tell them what customers love or hate and help them to improve.

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What to Expect

  1. Best Buy 2021
  2. Mobile & Apps
  3. Behind the scenes
The Aviva app has been improved upon, with the ability to research, sign up, trade and add money all functional. It also neatly links to very mobile friendly web pages with good functionality and portfolio information. 
 
Like the desktop version, it is pretty good and simple to navigate. Despite not being integrated into the app, the mobile experience is easy to use. 

The online experience is very traditional and works well enough. No complaints.

But then when the snail mail kicks in – OMG! The letters are substandard and alienating. We received five letters from Aviva after opening our test account. One of these was half complete and two of these had ‘Add Line 1’, ‘Add Line 2’ etc. in the address fields. The five letters could easily have been merged into one as they each contained a small piece of information about the new account.

Investment Choice

Products

Stocks and Shares ISA

Investment Account

Pension

Investments available

Own brand funds

Funds from other groups

Investment help

Robo advice / ready-made portfolios

Includes a shortlist of investments

Pick your own funds

Drawdown

Those in drawdown with Aviva were usually advised, with their adviser having set everything up on their behalf. However, once set up in drawdown most were complimentary about Aviva’s customer service and pretty neutral about their experience, using the word ‘fine’. Nothing special but fine.

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The 'Geeky' Details

Provider details

A big household name, Aviva offers easy entry into the pension space with a £50 per month minimum. The website is nice and simple and offers a shortlist of 4 ‘ready-made’ multi-asset funds that spread your money around lots of different shares and investments. Ballpark costs for a pension with one of these funds (including fund charges) are 0.75%, which is £7.50 a year on £1,000.

For those that want to pick their own investments, there is a much wider range of funds available, but you can’t buy individual company shares.

Although the service and experience is relatively bland, there is some comfort in choosing a large, familiar brand. And it is fairly straightforward to park your money into a solution that is managed and maintained for you on an ongoing basis at a reasonable fee.

To boost your pension savings, you can make a one-off payment at any time.

Aviva administers the drawdown of its pensions and does not charge any additional fees for this.

Important Facts & Figures

Provider Size:

Large insurance and pension firm / huge global brand
Minimum amounts: £5000 minimum initial lump sum
£50 minimum monthly amount

Your Questions

"I saw an ad in the Evening Standard - 'In Charge Not Overcharged' - which prompted me to contact you to ask how I can see how my Aviva SIPP pension is performing against the competition. I'm 51. The fund value is £161K and it was opened a year ago. Appreciate any tips. Danny"

Danny, London

30/05/2019

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Your question

I saw an ad in the Evening Standard - 'In Charge Not Overcharged' - which prompted me to contact you to ask how I can see how my Aviva SIPP pension is performing against the competition. I'm 51. The fund value is £161K and it was opened a year ago. Appreciate any tips. Danny

Danny, London

30/05/2019

Holly Mackay says

First, it's great to see that you spotted our Best Buy logo, on Interactive Investor's 'In Charge Not Overcharged' ad in the Evening Standard!

Welcome to our site!

 

Now this is a tricky question to answer, because I don't know exactly what's in your SIPP.

I did look at the charges for the Aviva Pension which you can buy directly online, and the charges start at 0.4% for administration and tier down.

That's that's pretty reasonable, and in line with the market average.

You ask about performance - it's hard to know because I don't know what funds they've actually invested in, or what investments are sitting inside your SIPP.

However, here are just a few things you can do, just to get a sense check of how it's doing:

  1. Look at what's in your fund. What you're looking for is the percentage of your fund or your pension, that they've invested in shares or equities. It might be 60%, it could be 100%, or it could be 20%. Try and work that out.
  2. See how similar pensions have done. As a proxy for fund performance, go and look at the Vanguard Lifestrategy range which is a low-cost fund. Try to map the percentage you've got in shares or equities to their option, and just see how they've done. This is of course not a perfect science at all, but if you can see that the Vanguard blended fund with 60% in shares has returned 10%, and your Aviva option with the same blend has returned 1%, well then you've got some questions to ask. It's not a perfect science, it's crude but I'm trying to help you with some rough and ready reckoners.
  3. Take a look at the FTSE. The other thing I do, is just look at what the FTSE 100 has done over the last year. It's down - global stock markets in general, are lower than they were. So if your fund is invested in global shares and it's down a bit, then this is entirely in line with what I'd expect.

When you're looking at performance, the thing you've got to work out, is what's the split between bonds and shares.

Have a look at a few other investments that have got a similar split, and just check you're not out of line. As long as things haven't fallen off a cliff over the last year, you should be fine. Aviva is a good, solid, reputable household name. It's unlikely that you're paying way above the odds.

As for performance, check out similar examples with a similar split, and just check your performance is around there or thereabouts.

If it's not, you've got some questions to be asking.

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

"I'm a 48 year old with minimal pensions. I would like to start a new pension to save for the next 12 years. I've already set up a Stocks & Shares ISA with Nutmeg, so would like to start my pension with another provider. I know little about investments so would like to use a company that has ready made funds based on risk assessment. Which would you recommend?"

Sam, Norfolk

30/05/2019

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Your question

I'm a 48 year old with minimal pensions. I would like to start a new pension to save for the next 12 years. I've already set up a Stocks & Shares ISA with Nutmeg, so would like to start my pension with another provider. I know little about investments so would like to use a company that has ready made funds based on risk assessment. Which would you recommend?

Sam, Norfolk

30/05/2019

Holly Mackay says

My first question is why you want to look to set up a pension elsewhere.

There are benefits in having your ISA and pension managed in the same place.

Ring Fencing

Nutmeg and most other investment providers will ring fence client money from their account.

So if anything goes wrong, your money is held by what we call a custodian. They are also covered by the Financial Services Compensation Scheme (FSCS), which covers you for up to £85,000 we hold with any one provider, if they get into troubles. So do have a look at that. 

If you still want to look elsewhere, not so many of the robo advisers have pensions. You could, if you're worried about security, look to stick with a household name such as Aviva, who will let you buy a DIY pension online from them.

Robo advisers

Other options would be to use more of what we call an investment supermarket. Hargreaves Lansdown is the country's biggest. It's a FTSE 100 firm, if you're worried about security. So that might be a good place to look. They can be expensive for much larger accounts, but if you're getting started with the pension and their service is good, then the fees won't be relatively out of line with with the market.

Ready meals

Other places you could look to start a DIY pension, would be AJ Bell Youinvest. Unlike with Nutmeg and Aviva, both of whom offer ready-made pension investment packages, with Hargreaves and AJ Bell Youinvest you will have to pick the investments you actually put into your pension.

If you want the investment equivalent of a ready meal, then have a look at what we call multi asset funds to put inside your pension. Vanguard's Lifestrategy range or BlackRock's Consensus range are two such options. 

Result:

On balance, if you've got a relatively small amount in your ISAs and are starting off with a pension, I think it sounds like it may make sense just to stick with the provider you're with and the service that you know.

Hope this helps,

Holly

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

"I have had a long and successful career, and intend to retire in autumn, aged 60. I have earned strong money, but being risk-averse, I have been content to let it mount up largely as cash, plus a pension (along with some smaller Stocks & Shares ISAs etc). I now find myself with £1 million in a low-cost Aviva pension, plus £2.5 million in cash. It is my hope to leave my pension untouched, and pass it over as part of inheritance tax planning. I have one son and a new grandson, who I would like to leave as comfortable as possible when I'm gone, so would like to balance my risk-adverse character with making my money work harder for us all. I have talked with several IFAs, but given my risk/return appetite, their fees seem to eat up most of the benefit they offer over my current position. I guess my question is, do IFAs normally bring sufficient benefit to low risk strategies, to make it worthwhile or am I better off cautiously investing myself, and saving the fees? Many thanks, Stephen"

Stephen, North Yorkshire

01/04/2019

Read our reply

Your question

I have had a long and successful career, and intend to retire in autumn, aged 60. I have earned strong money, but being risk-averse, I have been content to let it mount up largely as cash, plus a pension (along with some smaller Stocks & Shares ISAs etc). I now find myself with £1 million in a low-cost Aviva pension, plus £2.5 million in cash. It is my hope to leave my pension untouched, and pass it over as part of inheritance tax planning. I have one son and a new grandson, who I would like to leave as comfortable as possible when I'm gone, so would like to balance my risk-adverse character with making my money work harder for us all. I have talked with several IFAs, but given my risk/return appetite, their fees seem to eat up most of the benefit they offer over my current position. I guess my question is, do IFAs normally bring sufficient benefit to low risk strategies, to make it worthwhile or am I better off cautiously investing myself, and saving the fees? Many thanks, Stephen

Stephen, North Yorkshire

01/04/2019

Catherine Morgan says

Hi Stephen,

Firstly, what a fantastic amount of money to have accumulated ready to support your retirement. Now is a great time to be considering your options.

You have asked a very worthwhile question. Managing your own finances when you go into retirement is a little tricky, as you need your money to last you potentially for 40 years. If you are determined to leave money to your family, you may also want to consider how you can shelter some of your savings from inheritance tax, and long-term care planning issues that may arise in the future. 

Your attitude to risk should have no bearing on the value that an IFA can bring to the table.

However in my opinion, for you, it is important to differentiate between a financial adviser vs a financial planner.

A typical financial adviser who operates on a ‘assets under management’ model will charge you between 0.75-1% per annum.

It is important to ask them what they provide for the annual fee. If it is just managing the money invested, then I would have a conversation with financial PLANNERS. Financial planners will provide you with a financial forecast to help you to plan out scenarios and manage issues such as tax planning, inheritance tax and safe withdrawal rates. This will ensure that you never run out of money, whatever your tolerance to risk is.

The focus here is on planning and not just managing risk, investment strategies, and financial products. 

In reality, the question you are asking here is "how can I protect my lifestyle, so that I can never run out of money, and I can leave a legacy to my family.”

Financial planning will help you to answer this. Some planners will allow you to work with them on a fixed fee arrangements, and it may well be that you ask them to create a financial plan first, and then decide if their ongoing service is of value to you.

With a pension fund at £1 million, you will need to consider Lifetime allowance limits, as your pot may grow in excess of the allowance, and also other inheritance tax planning strategies for the cash, depending on your spending plans and objectives. 

I hope that helps. 

Catherine 

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.