Personal PensionAug 19 2014

Zurich to launch ‘flexi-access’ drawdown proposition

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Zurich has confirmed that it is working on a new flexi-access drawdown facility, which will be ready for April 2015 when radical pension changes announced in the Budget come into effect.

The insurer currently has no flexible drawdown capability, “but is developing a response to the new flexi-access drawdown ready for April 2015”.

A spokesperson for the firm said: “It has always been our intention to introduce a flexible drawdown facility on the Zurich Intermediary Platform.

“Historically, flexible drawdown will have been appropriate for a relatively small minority of pension customers who had accumulated significantly above average savings. The changes announced in the 2014 Budget, mean its appeal has been broadened.

“The reduction in the minimum income requirement for flexible drawdown from £20,000 to £12,000 and the replacement of ‘capped’ and ‘flexible’ drawdown options with the new ‘flexi-access’ drawdown is influencing the design and delivery of our new flexible solutions for the broader rule changes due in April 2015.”

Chancellor George Osborne rocked the annuities market to its foundation by stripping away all caps and limits on drawdown in the Budget on 19 March this year.

Earlier this month, HM Revenue and Customs published draft guidance on clauses for the Taxation of Pensions Bill, which will bring into law the changes confirmed by the government last month that will liberate savers’ access to savings.

Options include placing a fund into drawdown under a new type of fund known as ‘flexi-access drawdown’, from which consumers can withdraw any amount over whatever period they choose.

Providers are now preparing for the changes which need to take place in order to equip them for the new pensions model.

Axa’s Elevate also recently announced it is set to launch a ‘flexible’ drawdown service in advance of next year’s at-retirement reforms.