More providers have revealed their post-April pension proposition this week, with Alliance Trust and Metlife both confirming they will offer the full pension flexibilities from April.
Metlife has confirmed that it will provide ‘full flexibility’ for existing and new customers from the launch of new pension rules in April. Metlife is not introducing any charges for flex-access drawdown, taking ad-hoc lump sums or the whole fund.
Current charges for existing customers depend on what the client has – Metfife offers either capital or income guarantees – and start from 1.99 per cent a year excluding adviser charges, the spokesperson confirmed.
Yesterday (25 February), Alliance Trust announced it hopes to offer all flexible access options, saying flexi-access drawdown is already in place and that it is “striving to be live” from 6 April with the uncrystallised fund pension lump sums option.
Alliance confirmed that from January 2016 the annual drawdown fee will be £276 - and from April there will be no fee for being in drawdown. Previously, if a customer was in drawdown a charge for their general Sipp administration was charged separately.
It added ad-hoc uncrystallised lump sum payments will incur a “small charge” to cover the costs associated with making this payment to the client. Whether or not charges will be levied for taking these irregular withdrawals is emerging as a key area of charging differentiation.
Last week Hargreaves Lansdown said it would be offering all of the access options and detailed all fees, including that set-up fees will be scrapped, apart from uncrystallised ad hoc lump sums. It has now confirmed that there will be no charge for ad-hoc withdrawals.
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.
Many providers have unveiled propositions but not pricing, with some stating they will reveal their charges in line with their 30-day change disclosure obligation at the beginning of March.
A handful of respondents to an industry-wide FTAdviser investigation gave the first hints last week of what models may look like.
peter.walker@ft.com, donia.o’loughlin@ft.com
