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.
Last month, an FTAdviser investigation revealed variance in charges for new pension propositions, with key disparities including costs for taking irregular or full lump sum withdrawals and fees charged by larger firms and smaller self-invested providers.
At the time, AJ Bell, Dentons and Rowanmoor were not able to respond.
To access flexi-access drawdown at all ages or capped drawdown before age 75 via its self-invested pension, the annual cost is £150. The charge increases to £250 for those accessing capped drawdown who are aged over 75. Both these charges are applicable if funds are in the account but no income is taken, AJ Bell said.
To access regular payments without crystallising the pot, the charge is £150 per annum, but one-off ad-hoc payments will cost £75 for each withdrawal. To withdraw all funds, via FAD or UFPLS, savers with AJ Bell will pay £250.
These charges mean AJ Bell is applying a similar charging model as most smaller platforms and bespoke self-invested pension providers.
Most are levying annual drawdown fees, starting at £100 with Liberty and rising to £276 with Alliance Trust Savings, and charge for ad hoc withdrawals, with Barnett Waddingham and Talbot and Muir charging £200 per withdrawal, and Hornbuckle an annual £175 plus £50 per instruction.
The full withdrawal fee is at the higher end of the range, with only Suffolk Life charging more for general cashing out that is not within a short period of opening the account.
Larger providers generally claim to levy few charges outside of general admin fees. LV’s personal pension (£150) and Royal London (£184) apply a fixed set-up fee for drawdown, while Scottish Widows (up to 0.2 per cent) and Standard Life’s personal pension (up to 0.51 per cent) apply percentage charges.
It should be noted, however, that most charges revealed by providers relate to new, platform-based products. Legacy charges, which are often considerably higher, have not been disclosed and often these schemes are not offering full flexibility.
See below for table of charges.
| Firm and plan | Product charge | Full withdrawal | FAD | UFPLS |
| Aegon Arc | Tiered. From 0.6% below £30k, to 0.45% up to £250k. No charge thereafter. Variable AMCs on investments. | £0 | £75 | £0 |
| Aegon One Retirement | Tiered. 0.3% on first £250k, no charge thereafter. Variable AMCs on investments. | £0 | £75 | £0 |
| AJ Bell | Annual set up fee of £120, waived if assets above £25,000. Custody fee from 0.05 to 0.2 per cent. | £250 if closed within the first year, thereafter it’s £75 | Annual fee of £150. | Annual fee of £150 if ‘regular’. Otherwise £75 per withdrawal. |
| Aviva (‘core’) | Tiered. From 0.35% up to £30k, to 0.1% if over £400,000. | £0 | £0 | £0 |
| Aviva (‘choice’) | Tiered. From 0.4% up to £30k, to 0.15% if over £400,000. | £0 | £0 | £0 |
| Aviva (‘flex’) | £250 annual fee plus tiered charges as per ‘choice’ option. | £0 | £0 | £0 |
| Alliance Trust Savings | From January 2016: £186, or £276 if in drawdown. | If via UFPLS £0. If via drawdown £40 plus VAT. | Annual fee of £276 from January 2016. | £40 plus VAT per withdrawal. |
| Barnett Waddingham | £250 plus VAT | £0 | £200 to set up. £75 for annual or ad-hoc payments. £156 for regular payments. | £200 per withdrawal. |
| Fundsnetwork | Service fee 0.25%, investor fee £45 | Currently under review. | £0 | £0 |
| Hargreaves Lansdown | 0.45% of funds under administration | £295 plus VAT if taken within 12 months. | £0 | £0 |
| Hornbuckle (single) | £250 | Arrangement closure fee of £250. | Annual admin fee of £175 plus £50 per instruction. | Annual admin fee £175 and £50 per instruction. |
| Hornbuckle (full) | £525 | Arrangement closure fee of £250. | Annual admin fee of £175 plus £50 per instruction. | Annual admin fee £175 and £50 per instruction. |
| James Hay iSipp | £195 if assets below £195k, no charge thereafter. Investment charges c.0.18% on ‘typical’ £200k. | £150 | £150 annual fee, plus set-up charge of £100 per tranche of benefits. | £100 per withdrawal. |
| Liberty | £150 | £300 if Sipp is closed in year 1, £200 in year two and £100 thereafter. | £100 per annum. | £25 per withdrawal, up to £100 cap. |
| LV Personal Pension | Tiered. From 0.25% to 0.1% if over £1m. | £0 | £175 one-off set up charge. | £0 |
| LV Sipp | Tiered. 0.55% on first £75,000 and 0.1% over £1m. | £0 | £0 | £0 |
| Old Mutual | Tiered from 0.15% to 0.5%. | £0 | £0 | Offered as partial crystallisation drawdown. |
| Novia | Tiered from 0.5% to 0.15%. | £0 | £75 per annum | £0 |
| Metlife (unit-linked guarantee) | Tiered, starting from 1.99% a year. | £0 | £0 | £0 |
| Novia | Tiered from 0.5% to 0.15%. | £0 | £75 per annum | £0 |
| Prudential | Variable AMCs charged on underlying funds. | £0 | £0 | £0 |
| Royal London | Tiered from 0.9% to 0.35%. | £0 | One-off set-up fee £184. | First payment in a year free. Firm ‘reserves the right’ to apply a one-off £184 if two or more payments taken in a year. |
| Scottish Widows retirement account | Tiered. From 0.7% to 0.15% to depending on pension fund size. | £0 | Additional charge of 0.2% to 0.05% on amount held in drawdown. | 0% (Minimum of £5,000 per withdrawal.) |
| Standard Life (Active Money Personal Pension) | £0 | £0 | From 0.51%. | From 0.51%. |
| Suffolk Life | Tiered. From £255 to £515 per annum, depending on assets. | £300 | One-off £155 set up plus £155 per annum when income taken. | £155 per withdrawal. |
| Talbot and Muir (Simple account) | £250 + VAT. | £125 | Crystallising fee £125, annual fee £150. Additional tranche £75. | £200 per withdrawal plus VAT. |
| Talbot and Muir (Elite account) | £420 + VAT. | £125 | Crystallising fee £125, annual fee £150. Additional tranche £75. | £200 per withdrawal plus VAT. |
| Talbot and Muir (Multiple accounts and property) | £470 + VAT | £125 | Crystallising fee £125, annual fee £150. Additional tranche £75. | £200 per withdrawal plus VAT. |
| Transact | Tiered. Average 0.3% plus £80 wrapper fee | £0 | £0 | £0 |
| Zurich | Tiered. From 0.35% to 0.22%. (For retirement account, additional £75 annual fee.) | £0 | £0 | £0 |
donia.o’loughlin@ft.com
