Advisers want capped drawdown to remain available post 2015

Talbot and Muir, the Sipp and SSAS provider, has reported a surge in the number of advisers calling it's Technical Team to discuss capped drawdown and their desire for it to remain post April. New pension freedoms announced in the Budget earlier this year will end new capped drawdown plans for members after April 2015 and usher in a new type of drawdown plan called flexi-access drawdown. Claire Trott, head of technical support at Talbot and Muir said: "We have been taking an increasing number of calls from advisers questioning their client's ability to enter capped drawdown post April next year. There seems little sense in stopping capped drawdown as it allows policyholders to monitor their income levels against a set standard without the need to lock in to an annuity. "But the Money Purchase Annual Allowance (MPAA) rules may penalise those that don't want to take advantage of the pensions reforms but want to use pensions as they were intended, to provide a sustainable income in retirement. By accessing income of any sort, members will not have the flexibility to make larger pension contributions in the future should their circumstances change. "Capped drawdown is well established and well understood by advisers and it is a clear backwards step to remove all barriers even for those that want them." {desktop}{/desktop}{mobile}{/mobile} For those advisers with clients in capped drawdown currently, or who move into it before April 2015, they can remain in the product, says T&M. T&M says "so why not leave the option open for those that don't want to be hit by the MPAA rules and the complexities surrounding them?" Carl Lamb, managing director of Financial Plannners Almary Green, said: "The Government has been clear in its desire to encourage long term savings, so it seems nonsensical to me that my clients are being penalised by restricting their retirement options with the removal of capped drawdown meaning the only way to take drawdown income will trigger the MPAA rules. "I can see a situation where a client that has previously needed to access some income receives a redundancy payment but will be limited to using just £10,000 as a pension contribution, rather than £40,000 because of the additional restrictions. I would urge a rethink on capped drawdown to ensure that this remains in place."

Advisers want capped drawdown to remain available post 2015

Related items

News from Twitter