Standard Life clarifies position on drawdown levels

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A spokesman for Standard Life said any increase in drawdown levels it makes follows specific customer income payment instructions.

Clients would have either opted for a fixed income, or a percentage of the maximum GAD limit which will go up or down automatically with any change in GAD limits.

The clarification follows a comment from David Trenner, technical director of Glasgow-based advisory firm Intelligent Pensions, this week, who said that the practice of increasing the maximum automatic amount an investor could withdraw to 120 per cent could go against a client’s wishes.

The Standard Life spokesperson said: “Where customers have told us to pay a percentage of the maximum income allowed, they will automatically get a higher income when the limit goes up from the start of their next income year.

“This is the same approach we take for any income recalculation for these customers.

“For those that have told us they want a percentage of the maximum - more than 95 per cent have told us to pay the maximum possible. And the vast majority of these instructions were given before April 2011, when the maximum allowed was 120 per cent.

“It would be remiss not to follow existing instructions.”

The spokesperson added: “Similarly, where customers have told us to pay a fixed amount of income, we will follow this instruction – so their income payments won’t change. We are fully engaging customers and their advisers on this topic.”