More help for savers with small pots: Helm Godfrey
Too few providers are providing functionality for savers with small pension pots who would qualify for flexible drawdown, an adviser has claimed.
Paul Hammond, IFA for Hants-based Financial Future Associates, said he had a client with a £20,000 personal pension pot but was struggling to find a provider who would deal with such a small fund.
He said: “I can see flexible drawdown becoming more popular option for clients with pots for around £20,000 to £50,000 that want to strip funds down over a short period and who qualify for flexible drawdown.”
Mr Hammond’s comments came as DWP private pensions policy adviser Mike Le Brun said the department would look at how to provide access to advice on transfers following the recent consultations on small pots.
Graham Cross, managing director of Helm Godfrey, said: “We provide advice on pension pots as low as £20,000 through our iRetire service and we intend to write to Mr Le Brun offering to provide some input into how the DWP and advisory firms can make advising on small pots work financially.
“We hope this can inform some of the policy thinking on the issue. The need for advice on small pension pots is great and many financial advisers neglect this market simply because the economics of it make it difficult from a profitability point of view.
“However, there are providers out there who offer advice to this segment and we are one of them. The introduction of auto-enrolment is potentially going to hugely increase the number of small pension pots, so the lack of advice is going to be become a greater issue, potentially affecting millions more people.”
Greg Kingston, head of marketing for Suffolk Life, said he could see a trend for people with small pots who qualify for flexible drawdown and just want to take the cash.