‘Drip-feed drawdown’ can now be accessed via Old Mutual Wealth’s Collective Retirement Account plus provider’s stochastic modeller has been updated.
This new development, available from 16 November, allows customers to use the least amount of pension capital to deliver their monthly retirement income needs.
Once an instruction is made for regular withdrawals, the process is automatically repeated, including any associated benefit crystallisation event calculations.
Advisers and clients will be able to control the tax they pay on regular monthly income withdrawals by drip-feeding their tax-free cash lump sum in order to provide the required income, build a drawdown fund for future use, or combine monthly tax free cash withdrawals alongside of taxable income to deliver their monthly income needs.
This is instead of taking all their tax free cash in one go.
To accompany these new choices, Old Mutual Wealth has also upgraded the functionality of its Retirement Income Explorer Tool, which allows advisers to map out a client’s income plan, using tax-efficient methods across all investment assets a client holds either on or off platform.
Using a stochastic modeller, the tool aims to help advisers bring to life a range of probable outcomes, based on realistic forecasts of variables such as life expectancy, investment returns and inflation.
The interactive process produces reports, which can be branded with the adviser’s logo, that will help to demonstrate the value of advice by illustrating likely outcomes in retirement dependent upon the choices a client makes.
Adrian Walker, retirement planning manager at Old Mutual Wealth, said: “Since the pension reforms were announced in March 2014, we have constantly been looking to enhance the service that we offer advisers and their clients.
“The CRA was built with flexibility in mind and has been delivering flexible income options for advisers and clients for many years, but I’m delighted that these latest enhancements will significantly increase the solutions we have available.”
Chris Daems, director of Cervello Financial Planning, said any additional service which allows for individuals to take their retirement income and make it easier to incorporate tax planning as part of their proposition should be applauded.
He said it was therefore good to see Old Mutual Wealth adopting this approach.
emma.hughes@ft.com
