Nucleus will not be offering the facility for clients to withdraw ad-hoc lump sums without crystallising their funds, stating that there is no demand for it.
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.
Speaking to FTAdviser Jon Gwinnett, pensions technical manager at Nucleus, said that the firm is not seeing demand for UFPLS.
He said: “We already offer flexible drawdown and our investors can see the tax treatment for both is identical.
“For both, 25 per cent is available tax free with the rest taxed at marginal rate. I can see the case that if a provider is not offering drawdown, clients would want them to offer UFPLS as an alternative.”
Old Mutual is currently the only provider not offering its clients the uncrystalised lump sum option, however it will also allow clients to withdraw ad-hoc lump sums without crystallising the pot via its flexi-access drawdown facility.
Below is a table of charges for new access options:
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 | 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. |
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