Aviva has launched a new retirement income solution called Aviva Guided Retirement, which is designed to provide workplace pension customers with a sustainable income for life. This “flex first, fix later” approach combines pension drawdown strategies with a later-life annuity, allowing customers to prioritize flexibility in the early years of retirement and security in the later years. The solution is available to Aviva Master Trust members, who will have access to a guided framework and ongoing support throughout retirement.
Aviva Guided Retirement aims to provide a sustainable income by dividing customers’ pension savings into three pots: Flexible Income Pot, Guaranteed Income Pot, and Occasional Spending Pot. Before splitting the pension money between the three pots, members have the option to take up to 25% as a tax-free cash lump sum. The solution is designed to be tailored to individual needs, and customers will be able to make changes as their circumstances change.
The launch of Aviva Guided Retirement comes as the Pension Schemes Bill outlines key measures for those nearing retirement, including a likely requirement for pension schemes to provide clear and accessible default options for converting savings into a sustainable retirement income. Aviva believes that its new solution meets these requirements and reflects what members have told them they want: a retirement journey that offers both flexibility and security.
A recent report by Aviva and Age UK found that less than half of mid-retirees are confident they are on track to make their private pension savings last for life, and nearly two thirds think there is not enough support for people managing their financial needs as they age. The report recommends that “flex first, fix later” retirement income solutions should become the norm, as they have the potential to deliver better outcomes for people approaching the later part of their life.
Aviva Guided Retirement is designed to address these concerns and provide customers with a practical framework to help them feel more confident before, at, and throughout retirement. The solution is available to Aviva Master Trust members, and Aviva plans to offer it to more of its workplace pension customers in the future. With its innovative approach and ongoing guidance and support, Aviva Guided Retirement aims to set a new benchmark for how pension schemes can deliver lasting value and guidance throughout the retirement journey.