Skandia has launched a system functionality to enable customers and financial advisers to take advantage of the UK’s new flexible pension regime with immediate effect.
In the Budget announced last week, the government revealed that customers in flexible drawdown need only show they have GBP12,000 in guaranteed income to be eligible (down from GBP20,000), and capped drawdown maximum income would be increased to 150 per cent of GAD (up from 120 per cent).
The changes required some significant system changes for retirement income providers.
Skandia’s changes means that, in accordance with the government’s announcement, existing drawdown clients will move to 150 per cent of GAD from the start of their next drawdown anniversary. Existing clients wanting to start drawdown and any new business will have access to capped drawdown at 150 per cent immediately.
In addition, clients who are able to demonstrate the lower amount of GBP12,000 in guaranteed retirement income will now be able to enter a flexible drawdown arrangement.
Advisers will receive details of how their clients are able to benefit from the changes in an email on 28 March.
Adrian Walker (pictured), retirement planning manager at Skandia, says: “We welcomed the Chancellor’s changes to the retirement income market in last week’s budget and immediately focused on how we can deliver the new flexibility as quickly as possible for financial advisers and customers. Advisers and their clients can now take advantage of the new rules for existing as well as new drawdown arrangements and we expect to see increased take up of income drawdown as a result of these changes.”
