Another provider has confirmed that it will be offering all the new pension income options from 6 April 2015 when the radical new pension freedoms are implemented.
Suffolk Life announced today (10 February) that it will be offering its customers the option of uncrystallised fund pension lump sums.
This allows savers to take lump sums from their pension after the age of 55 without crystallising the pot, with 25 per cent of each sum tax-free to account for the pension commencement lump sum tax-free cash. Some have said the rules allow pensions to be used like bank accounts.
The provider will also be offering capped drawdown for those investors who wish to retain the higher annual allowance of £40,000 which they cannot do if they convert to the other options.
If pension funds are crystallised by other means, the annual allowance will be reduced to £10,000.
Suffolk Life will also be facilitating conversions from capped drawdown to flexi-access drawdown on request, for those investors who wish to start drawing more than their current income limit.
The provider added that all flexible drawdown plans automatically converted to flexi-access drawdown, so that investors may benefit from re-starting contributions if they wish
It added that when a self-invested pension starts using one of the new options, a ‘trigger event’ occurs, implementing the money purchase annual allowance of £10,000 and automatically alerting the change to further support planning and advice.
According to Paul Evans, pension technical manager at the firm, there will be “limited demand” for Ufpls, as investors are still likely to be driven by withdrawing their maximum lump sum.
Axa Wealth recently joined the currently small number of providers to have confirmed they will be offering the full suite of at-retirement access options across its range of products in time for 6 April, along with the likes of AJ Bell and Zurich.
Rowanmoor Group recently said it expects demand for its Sipp and Family Pension Trust to grow hugely in the post April pensions regime, as the rules bring greater tax-efficiencies, estate and inheritance management opportunities to member-directed pensions schemes such as Ssas’, Sipps and in particular, family Sipps.
The firm said that “as part of this new era in pensions” it plans new features for its Sipp product, which are expected to debut in the coming months.
ruth.gillbe@ft.com
Additional reporting by Donia O’Loughlin
