Axa Wealth joins the few offering full pension access

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Axa Wealth joins the few offering full pension access

Axa Wealth has 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, FTAdviser can reveal.

According to a statement from the firm, all of the core access options under the legislation, which would include taking the whole pot as a cash lump sum, withdrawing ad hoc lump sums without crystallising the pot, or the new flexi-access drawdown, will be made available in the Spring.

The reform-ready retirement proposition includes The Retirement Wealth Account, The Personal Pension, the Elevate Pension Investment Account and the company’s group Sipp, Family Suntrust.

The announcement means the firm joins the likes of Zurich, which confirmed last month it would offer the full suite of pension access from freedom day, and Aegon, which has also previously said it will make the adjustments necessary to comply fully with the new tax regime.

Elsewhere, LV has said it will be launching new at-retirement products ahead of April, including a retirement income ‘account’, while a number of specialist providers such as James Hay have also said they will be able to offer all of the elements of the new regime.

On the other hand, many of the larger life companies and other major pension schemes are not likely to be ready for the changes. According to a survey by Xafinity, only 5 per cent of pension schemes plan to let members take a lump sum in April, while only 2 per cent will offer the full range of flexibilities.

Closed book firms are likely to be among the least flexible. Phoenix Group, which has 2m policyholders, is still unsure about what will be on offer, while Equitable Life, which has more than 500,000 policyholders, has said only that it will offer ‘some’ flexibility.

Adrian Boulding, pension strategy director at Legal & General, previously told FTAdviser sister title Financial Adviser his firm would not be launching any products before 6 April, but would be waiting to see what his clients wanted before designing a new offering.

At least one firm, equity release specialist Age Partnership, has said in response it is set to offer both simplified and drawdown transfer options to people whose pension schemes are unable to offer them the full range of pension freedoms, charging flat rates of 1.25 or 2 per cent.

Axa Wealth said that alongside the access options, it will be launching a new range of tools, including an adviser toolkit to help show how much money people will need to cover the essentials in retirement.

The firm will also offer tax optimiser tools, to help show the most tax efficient ways to invest for the future and withdraw money as and when customers need to.

David Thompson, managing director of business development and proposition at Axa Wealth, said that as part of its response to the pensions changes the full range of pension products will be ready to offer advisers and their clients the flexibility they want from April 2015.

“In the new retirement world, customers will be looking for competitive and flexible solutions to provide a secure and lasting income in retirement.”

According to figures from YouGov and calculated by Axa Wealth, from a total sample size of 2,532, the average adult in the UK potentially had almost a 40 per cent drop in the level of income they would receive in retirement compared to while they are working, and guarantees were important to over 80 per cent of retirees.

“Many providers are now investigating options for post-annuity breeds of income guarantees, this is an area the Axa Group already has expertise and believes will play a much larger part in an holistic retirement solution post-April.”

ruth.gillbe@ft.com, ashley.wassall@ft.com