Today, Aviva launches the Pension Portfolio Trust, an innovative new proposition giving clients greatly enhanced flexibility and control over their finances when they’re planning their bequests, using a specially designed integrated trust.
Since the introduction of Pension Freedoms in April 2015, there has been a continued trend towards giving people more control over their later life finances. Today’s launch of Aviva’s Pension Portfolio Trust continues along the same path of flexibility with control. The introduction of Aviva’s Pension Portfolio Trust will give advisers another tool in enabling their clients to plan their inheritance especially where there is added complexity that often accompanies today’s family structures with an estimated 42% of marriages in England and Wales ending in divorce (ONS, December 2016).
The Pension Portfolio Trust allows clients to nominate the ultimate destination of their pension fund with the knowledge that their wishes will be dealt with by their own trustees, rather than left to the discretion of Scheme Administrators. It is particularly relevant where clients are in a second or subsequent marriage and may wish to leave their pensions to the new spouse and then to children from previous marriages. This level of control could not currently be guaranteed with Flexi Access Drawdown.
Tim Orton, CEO Aviva Adviser Platform, says,
“Aviva’s Pension Portfolio Trust is the suitable choice where the beneficiaries aren’t necessarily the obvious choice, and gives more flexibility for people when they are planning their bequests. This will become increasingly important in an age of more complex family relations and where second marriages are the norm.
“The Pension Portfolio Trust could be the suitable choice, for example, if a client wants to ensure that their nominated beneficiary can benefit during their lifetime, but they also want to be able to choose who the remaining capital will be passed to on their death. This is a scenario which will be familiar to many advisers helping their clients with later-life planning.
“It’s also suitable where there are vulnerable beneficiaries, for instance if they are handicapped and receiving means-tested state benefits, or where there’s a risk of divorce or bankruptcy.
“The advantages of the Aviva Pension Portfolio Trust include clients being able to appoint their own trustees who they know well and who they feel are likely to follow their wishes, and the trustees can be informed what clients want to happen for successive beneficiaries. It provides an added element of flexibility which isn’t always available with Flexi-access Drawdown, should a family situation demand it.
“In addition to this, we will continue to offer the Expression of Wish, typically in conjunction with the Flexi-Access Drawdown, which remains suitable for clients who are happy that their nominated beneficiary receives access to their share of the fund, and then chooses who will receive any funds remaining on their subsequent death. It is also more suitable for those for whom tax efficiency is a key concern.”
For clients - Aviva’s Pension Portfolio Trust – at a glance –
What it does -
- You can use the Aviva Pension Portfolio Trust to place your Pension Portfolio Account into trust. Any lump sum death benefits will be paid directly to the trustees you appoint
- You appoint your own trustees
- Your own trustees will decide which of your beneficiaries will receive benefits from the trust, and when
- You can give the trustees a letter of wishes outlining how you would like them to use the trust funds
- You must regularly review the trust to make sure that is remains suitable for you
The Aviva Pension Portfolio Trust is suitable when –
- The beneficiaries you have nominated are not an obvious choice to someone who does not know you (for example, if you are married with children but ask for the fund to be passed to someone else)
- You would like the beneficiary you have nominated to benefit during their lifetime, but you want to be able to choose who the remaining capital will be passed to on their death
- You want to avoid vulnerable beneficiaries inheriting directly
- Beneficiaries are handicapped and in receipt of means-tested state benefits
- Beneficiaries are at risk of divorce or bankruptcy
- You want to make provision for yet unborn beneficiaries eg grandchildren
The advantages of the Aviva Pensions Portfolio Trust are –
- You can appoint your own trustees who know you well and who you feel are more likely to follow your wishes
- You can tell the trustees what you would like to happen for successive beneficiaries
- For example, your trustees can provide funds to your second wife / husband, but on her / his death can pay any remaining funds to your children
For more information, please go to -
Catherine Comben, Aviva UK Media Relations Manager; T: +44 (0)1904 453394;M: +44 (0)7800 692087; E: email@example.com
Notes to editors:
- Aviva provides life insurance, general insurance, health insurance and asset management to 33 million customers, across 16 markets worldwide
- In the UK we are the leading insurer serving one in every four households and have strong businesses in selected markets in Europe, Asia and Canada. Our shares are listed on the London Stock Exchange and we are a member of the FTSE100 index.
- Aviva’s asset management business, Aviva Investors, provides asset management services to both Aviva and external clients, and currently manages over £319 billion in assets.
- Aviva helps people save for the future and manage the risks of everyday life; we paid out £34.4 billion in benefits and claims in 2016.
- By serving our customers well, we are building a business which is strong and sustainable, which our people are proud to work for, and which makes a positive contribution to society.
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