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Investment Times

NEW pension freedoms arriving soon

| 26 February 2015 | A A A
NEW pension freedoms arriving soon

No recommendation

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

Low-cost, flexible and accessible - these are not words typically associated with pensions. But these three words are becoming the norm, thanks to new pension rules.

Investors in the Vantage SIPP can take advantage already. Using our New Drawdown plan, from age 55 (57 from 2028) they can take up to 25% as tax-free cash and withdraw the income they need directly from their pension, which stays invested.

From 6 April there are no limits on how much can be withdrawn. It is even possible to withdraw the entire value, though as withdrawals are taxed as income this could lead to a large tax bill. Careful planning is necessary however - in income drawdown income is not secure, and large withdrawals or poor investment performance will increase the risk of running out of money in retirement.

No recommendation

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

Find out more about New Drawdown

New low charges

We have lowered our charges for New Drawdown, as well as making it more flexible and more accessible. There is no set-up fee, no transfer-in fee and no annual drawdown fee. There is no charge for moving an existing drawdown plan held with Hargreaves Lansdown to our New Drawdown plan. You will find our new low charges outlined below.

Register your interest

Investors can register their interest for New Drawdown today.. We are just waiting for final details from our regulator, the FCA, on what we need to tell investors considering income drawdown in light of the new pension rules. Once the details are issued we will send you an illustration and application pack, explaining the risks and benefits.

Register for New Drawdown now

Some may still benefit from existing rules

Currently income drawdown has a cap on the withdrawals that can be made each year. The new pension freedoms remove the need for a cap on the income that can be taken from drawdown plans started after 6 April 2015, but there are a number of reasons why some may still find it attractive to invest in existing drawdown, particularly those who intend to contribute to pensions in future, before it closes to new investors on 5 April. We have a handy comparison table which explains the pros and cons of the different accounts.

See our drawdown comparison table

Download a free factsheet on the new pension rules

Help if you need it

What you do with your pension is an important decision. Therefore, we strongly recommend you fully understand your options. We offer a range of information and independent financial advice if you are still unsure. Alternatively, Pension Wise, the Government’s new pension guidance service, is due to launch shortly providing a free impartial service to help you understand your options at retirement. Further details are now available at www.gov.uk/pensionwise.

Find out more about the Vantage SIPP

Income drawdown
NEW Drawdown Existing income
drawdown
Existing flexible
drawdown
Starting drawdown Yes NEW: No charge Yes No charge £295 +VAT
Each GAD calculation N/A £75 +VAT N/A
Regular income payments: Yes No charge Yes No charge Yes No charge
Alter payment amount/frequency Yes NEW: No charge £10 +VAT (no charge for instructions received after 5 April 2015) £10 +VAT (no charge for instructions received after 5 April 2015)
One-off payments: Yes NEW: No charge* £25 +VAT (no charge for instructions received after 5 April 2015) £25 +VAT (no charge for instructions received after 5 April 2015)

*if you withdraw the full amount in the first year of opening the account, there is a charge of £295 plus VAT. Not applicable to pension transfers out or to clients who held Flexible Drawdown in the Vantage SIPP before 6 April 2015.

View all our income drawdown charges

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.