The firm explained that advisers and their clients can use this to take money from a pension to achieve the level of income they want, as regularly as they want in the most tax efficient way.
The new feature means advisers can manage their clients’ level of taxable income, use it as a mix of part tax-free/part taxable income or fully tax-free income and set up automated income payments from the pension.
It also allows retention of clients’ uncrystallised fund to allow for further growth or higher tax-free sums through later crystalisation and retention of more value in the pension fund that can be passed on, potentially free from inheritance tax or income tax.
David Thompson, managing director of business development and proposition at Axa Wealth, called it a “compelling alternative” to traditional drawdown for those clients that want to stagger the income they take.
“We’ve already launched a LifePlanning toolkit that can give a clearer a view of financial planning. Now drip feed drawdown allows clients to take as much money from their pension as they want to top up their income in the most tax efficient way possible, while leaving the rest of the fund invested with the chance of further growth.”
The new feature is available on the firm’s Retirement Wealth Account and The Personal Pension.
Axa Wealth’s drip-feed drawdown comes after earlier this month the feature was introduced to rival Old Mutual Wealth’s Collective Retirement Account.