Hargreaves Lansdown will not be charging clients set-up or income withdrawal charges for its new drawdown plan, ahead of the pension freedoms being introduced from 6 April.
From 6 April, the four core options set out by the government to take income include an annuity, taking the whole pot as a cash lump sum, ad hoc lump sums without crystallising the pot, or new flexi-access drawdown.
Hargreaves currently charges £75 + VAT to conduct the Government Actuary’s Department income limit check on new capped drawdown plans and a £295 + VAT and set-up fee for new flexible drawdown plans.
However, the provider announced today (18 February) that all existing charges relating to the set-up of new drawdown plans, which will fall under FAD rules, and any income payments will be scrapped from 6 April.
Furthermore, this week marks the first date on which a pension provider is able to accept requests for transfers of a capped drawdown plan into the new flexible drawdown, although they will not actually be able to use the new rules until the first week of April.
Hargreaves said it has already received over 175,000 requests for information relating to the new regime.
Tom McPhail, head of pensions research at Hargreaves Lansdown, stated: “We have made this new drawdown accessible by stripping out any upfront charges and developing a suite of information and planning tools to help investors make the most of their retirement savings.
“Given the uncertainty over whether the pensions industry would be ready in time, we think investors will be reassured to see this first product launch in good time for the new pension freedoms.”
Hargreaves joins only a handful of providers who have announced what their charges will be post-April.
Old Mutual announced last week that there will be no specific charge to use any of the new flexi-access drawdown facilities. Instead customers will only pay the normal platform charge and underlying fund charges of their investment portfolio.
peter.walker@ft.com
