20th March 2014
Standard Life is decreasing the amount that customers need to have saved to access its income drawdown range with immediate effect. This is in response to the Chancellor’s Budget statement which introduced wide ranging changes for pensions.
From today, people with £30,000 of pensions savings – reduced from £50,000 – will be eligible for income drawdown with Standard Life. This will be particularly attractive to people who won’t be able to benefit under the new small pot rules which allow them to cash in their pension pot.
Rather than delay retirement, they can take a tax free lump sum right away and use Standard Life’s drawdown to bridge the gap until the new pension rules enhancing control and flexibility are introduced in 2015.
Alastair Black, Head of Customer Income Solutions at Standard Life says: “The Chancellor announced some of the most significant changes to the retirement marketplace ever. The main changes won’t come in to force until 2015 and some people might be considering delaying their retirement until then, to benefit from the increased flexibility and control.
“But Standard Life believes drawdown will help to bridge the gap and put people in a strong position. By using drawdown, they can take an income that supports their needs in retirement, while ensuring their pension pot remains invested. Then, when the pension rules change, they can then review their strategy. The flexibility and choice offered by income drawdown allows them to do that.
“This added flexibility also brings more responsibility. People will need professional help to think about where they invest their money, how they can use this flexibility while having a long term sustainable income and how they minimise their tax*.”
In January this year Standard Life announced that it had £10bn in assets under administration in drawdown and predicted a huge increase of people choosing drawdown in the UK.