Personal Pension  

Hargreaves launches retirement planning tool

Hargreaves launches retirement planning tool

Hargreaves Lansdown has launched a retirement planner tool which allows investor to calculate how to use a blended product solution, something which the government’s guidance service cannot help with.

The new tool allows investors to calculate how much of their pension fund can be allocated to an annuity and how much to retain in drawdown, along with a projection of how long their drawdown income could last for.

The move comes as the firm reports a four-fold increase in calls on their retirement helpline over the first two working days of this tax year compared to first two working days of previous tax year, along with a 70 per cent increase in pension calls overall.

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According to Hargreaves, many callers have complained their existing pension provider is not ready with flexible drawdown and facilitating the uncrystallised funds pension lump sum option.

The main challenge for investors appears to be in determining how they should allocate their pension fund capital - often between allocating to an annuity and managing drawdown funds - something which Pension Wise cannot help with.

Tom McPhail, head of pensions research at the firm, stated: “Pension Wise provides valuable guidance but it won’t help investors to actually set up their retirement income; this retirement planning tool helps to fill the vacuum in between free guidance and a full advisory service.”

The firm has also seen some more unexpected requests during the first few days of the pension freedoms, for example existing drawdown investors choosing to cut their income withdrawals now, in order to be able to take larger lump sums later.

“We’ve also seen a surge in death benefit nomination instructions as investors adjust to the more generous tax treatment on funds after death, said Mr McPhail, who added that it will be some weeks or months before clear patterns of investor behaviour really settle in.

peter.walker@ft.com