Freedom to take to much?

In 2015, it seemed as if there was something new in pensions every day. So far this year it seems have calmed down – for the time being – with the focus being more on the EU referendum and market turbulence. The quieter year for pensions legislation will be welcomed by many, as last year’s overhaul of the industry means many more people want access to their pension pots and to find a way to provide an income throughout their retirement.

Last year’s survey was unfortunately too soon to see the initial impact the retirement freedoms had on drawdown, but this year – now more than a year after the freedoms came into force – things are different and trends are beginning to show.

This year’s survey covers 39 drawdown providers (including some different plans from the same provider) so it gives a broad idea of what the whole industry looks like.

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Table 1 looks into the basic elements of each of the respondents within the survey. It includes details such as whether they offer a personal pension or a self-invested personal pension (Sipp) as well as the different drawdown options available, including a new addition to this year’s survey, uncrystallised funds pension lump sum (UFPLS).

Importantly, the Table also looks into the number of drawdown customers and assets under management. Last year’s survey showed that 222,915 clients were in drawdown as at 1 July 2015 and, as predicted, the figure has increased further to 307,492 this year. As with any survey, the number differs from provider to provider, but topping the Table this year is Standard Life, with 72,457 clients in drawdown. This is closely followed by Royal London with 54,170.

The pension freedoms now mean access to assets has grown, so in line with this, there has been an increase in assets under management. Over all providers, it now sits at £49bn – although larger respondents such as Aegon and AJ Bell did not disclose their assets – a 19 per cent jump on last year’s figure and 157 per cent from the survey in 2014.

Elsewhere in the survey, Table 2 shows the charges for income drawdown, which varies across the board, but does not change drastically from year to year.

Charges for starting drawdown through flexi-access remain relatively low. Some are offering it with no charge (many costs are covered within annual charges) and others around the £150 mark.

One-off payments are where it can catch clients out – for example, a one-off payment for flexi-access drawdown with Killik & Co could set you back £300, Aegon charges £75 while DP Pensions charges £120.

As with any product, fees should be looked at in depth because there will always be hidden charges, so while it may look cheaper from the headline fees, there are many other costs to consider.


When assessing last year’s drawdown survey results, it was clear that there had been no major impact during the first few months of the pension freedoms. Now, more than one year on, it tells a slightly different story.

Table 3 looks into the percentage of income drawn by clients. This year, the Table shows figures for both advised and non-advised clients to see if there has been any difference between the two.

In the past, clients tend to take the most or the least available. Similarly to last year, there is a higher percentage drawing nil income. The difference between advised and non-advised is surprisingly minimal. In fact, the average drawing nil income for both is 52 per cent. The biggest difference only lies with clients taking between 0 and 2.5 per cent income – 10 per cent for non-advised and 19 per cent for advised.