Personal PensionDec 19 2014

James Hay confirms pension lump sums for April deadline

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by

James Hay will offer a suite of flexible retirement options on its platform from 6 April 2015 when the pensions reforms come into force, including the ad hoc uncrystallised lump sum option which some have likened to making pensions akin to accounts, the company announced today.

The firm’s flexible retirement income solutions include capped drawdown, flexi-access drawdown and the uncrystallised funds pension lump sum. The options will be available to new and existing clients and it said income drawdown rates will remain unchanged across the various options.

The firm will continue to offer capped drawdown, which will retain the current £40,000 annual allowance for contributions. Flexi-access drawdown will be open to all clients from minimum pension age either starting drawdown from April 6 or wishing to convert a capped drawdown fund.

Advisers and their clients can take pension commencement lump sum and income payments of any level. With both these options, income payments can be made monthly, quarterly, 6 monthly or annually.

In terms of the uncrystallised funds pension lump sum, the client to take a lump sum of at least £1,000 from their uncrystallised funds, with 25 per cent of each payment taken tax free and the remainder subject to income tax.

All self-invested personal pensions will be able to accept transfers from crystallised and non-crystallised pensions, whether or not the receiving pension is in full drawdown.

As part of several product upgrades coming in the second quarter, James Hay will also be launching a new ‘on-platform’ discretionary fund management service at the starting price of 0.18 per cent for portfolios over £195,000.

At the same time it will increase the charges where external discretionary fund managers are used, it says in order to bring the cost of the service in line with the cost of delivering it.

Alastair Conway, chief executive at James Hay, said that 2014 was the year in which pensions finally became ‘sexy’.

“Come 6 April both new and existing James Hay clients will benefit from the ultimate in access and flexibility based on the new rules, complementing 20 years’ worth of Sipp innovation.”

peter.walker@ft.com