CompaniesApr 7 2015

Novia to charge drawdown rates for ad hoc lump sums

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Novia to charge drawdown rates for ad hoc lump sums

Wrap platform Novia will be charging its customers £62.50 plus VAT to access their pension via the uncrystallised lump sum option, bringing it in line with its drawdown charge.

Last month, FTAdviser revealed a number of provider charges for the post-April pension world. At the time, it was thought there would not be an additional charge to access the uncrystallised funds pension lump sum on the Novia platform, or to withdraw the whole fund.

It has announced today (7 March) that a charge of £62.50 plus VAT per annum has been introduced to cover the new payment type, as it unveiled that it will be offering all the new pension freedoms.

In addition to UFPLS, the wrap platform will also be offering flexi-access drawdown, which will enable regulator automatic disinvestments annually, quarterly or monthly.

Bill Vasillief, chief executive at Novia, said: “It’s the same concept [as drawdown]; one is crystallised and the other is uncrystallised.”

Clients who were in capped drawdown prior to the new pension freedoms will still be able to contribute to it, enabling the release of additional amounts of tax-free cash while continuing to benefit from the annual allowance of £40,000.

Novia will also offer all the options as regards the changes to rules surrounding death benefits.

Where someone with a Sipp dies before reaching age 75, those who are nominated to receive death benefits can do so tax free, with a choice of a lump sum, annuity or drawdown death benefits.

If they choose the drawdown option the income will be paid without deduction of income tax.

Shaun Allwright, director of business development, said: “We have been working closely with our software provider GBST to ensure all of these will all be available from the outset, thereby ensuring advisers can maximise for their clients any potential benefit the new pension freedoms regulations might provide.”

See below all charges relating to new pension freedom products from most major providers:

Firm and planProduct chargeFull withdrawalFADUFPLS
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.

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 SavingsFrom 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.
FundsnetworkService fee 0.25%, investor fee £45Currently under review.£0£0
Hargreaves Lansdown0.45% of funds under administration£295 plus VAT if taken within 12 months.£0£0
Hornbuckle (single)£250Arrangement closure fee of £250.Annual admin fee of £175 plus £50 per payment. Annual admin fee £175 and £50 per payment.
Hornbuckle (full)£525Arrangement closure fee of £250.Annual admin fee of £175 plus £50 per payment. Annual admin fee £175 and £50 per payment.
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 PensionTiered. From 0.25% to 0.1% if over £1m. £0£175 one-off set up charge.£0
LV SippTiered. 0.55% on first £75,000 and 0.1% over £1m.£0£0£0
Old MutualTiered from 0.15% to 0.5%. £0£0Offered as partial crystallisation drawdown.
Metlife (unit-linked guarantee)Tiered, starting from 1.99% a year. £0£0£0

Tiered from 0.5% to 0.15%.

£0£75 per annum£62.50 plus VAT per year

Variable AMCs charged on underlying funds.

Royal London

Tiered from 0.9% to 0.35%.

£0One-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 accountTiered. From 0.7% to 0.15% to depending on pension fund size.£0Additional 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£0From 0.51%.From 0.51%.
Suffolk LifeTiered. 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.


Crystallising fee £125, annual fee £150. Additional tranche £75.

£200 per withdrawal plus VAT.
Talbot and Muir (Elite account)£420 + VAT.£125Crystallising fee £125, annual fee £150. Additional tranche £75.£200 per withdrawal plus VAT.
Talbot and Muir (Multiple accounts and property)£470 + VAT£125Crystallising fee £125, annual fee £150. Additional tranche £75.£200 per withdrawal plus VAT.
TransactTiered. Average 0.3% plus £80 wrapper fee£0£0£0

Tiered. From 0.35% to 0.22%. (For retirement account, additional £75 annual fee.)