A handful of providers have revealed their post-April pricing for consumers to access their at-retirement propositions, with a number of disparities shown for accessing the new flexible drawdown option, taking ad-hoc sums and withdrawing the whole fund.
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.
FTAdviser reported earlier this week that, to date, while some providers have been forthcoming on what their post-April proposition will look like, most have yet to disclose anything on charges.
Many providers have said they will reveal their pricing in line with their 30-day change disclosure obligation at the beginning of March, but a handful of respondents to an industry-wide FTAdviser investigation have given the first hints of what models may look like.
Aviva, LV, Old Mutual, Standard Life, Fundsnetwork, James Hay, Liberty Sipp and James Hay all responded, giving some details on pricing across their range of options. Aegon has given information on its Arc and One Retirement products, as legacy scheme charges and options are still to be defined.
A key areas of difference appears to be around charges for full withdrawal, with Aviva, LV, Old Mutual and Standard Life all confirming there will no charge for clients to withdraw their entire pot post-April.
In contrast, self-invested firm Liberty Sipp will levy a ‘closure’ charge on its Sipp of £300 in the first year, falling to £200 in year two and £100 thereafter. This is similar to Hargreaves Lansdown’s move to introduce a £295 plus VAT quick flip exit charge for those withdrawing their fund within a year of opening an account.
Aegon, Fundsnetwork and James Hay have all yet to decide if they will apply a charge for full withdrawal.
In relation to the ad hoc uncrystallised lump sum option, Liberty Sipp is applying a per-payment charge of £25, capped at £100. Standard Life applying a drawdown-style 0.51 per cent fee once benefits are accessed.
James Hay will, irrespective of the option chosen to access benefits on an ongoing basis, charge a one-off benefit set up fee of £150. Aegon said its charges will be similarly simplified, so that clients pay a simple rate of £75 for any year they take income through any route.
All other providers to have responded so far said they will not charge for uncrystallised lump sums. Old Mutual said it will be offering ad hoc lump sums through flexi-access drawdown partial crystallisation, a theme that may also become common as more disclose their proposition.
In relation to the fees for drawdown post-April, charges are as follows:
• Aegon Arc and One Retirement products will charge up to 0.6 per cent and 0.3 per cent respectively;
• Aviva’s annual charge for the ‘core level’ proposition ranges up to 0.35 per cent, for ‘choice level’ and ‘flex level’ up to 0.4 per cent;
• Fundsnetwork says it does not charge for drawdown but has a platform fee of 0.25 per cent of funds and an investor fee of £45 per year;