Skandia today announces that its Collective Retirement Account (CRA) flexible drawdown facility has been extended to accept flexible drawdown transfers from other registered pension schemes.
When flexible drawdown was first introduced there was a very limited choice of solutions available. This led to many clients deciding to use a SIPP provider for flexible drawdown, purely due to the lack of choice elsewhere.
As the flexible drawdown market has evolved, clients now have more choice, and this new enhancement by Skandia creates an opportunity for those already using flexible drawdown through a different provider to review the costs associated with providing the facility.
Traditionally, there can be additional costs associated with establishing flexible drawdown, with some providers charging additional fees at numerous stages of the life of the drawdown including costs for setting up the facility or moving a capped fund into flexible drawdown.
Flexible drawdown is an integral option on Skandia’s platform pension (the Collective Retirement Account) representing a more cost-effective alternative for investors, currently charging just £57.20 per annum for the drawdown facility (in addition to its normal platform fee).
Some advisers and clients will want to continue to use flexible drawdown through a SIPP wrapper due to the wider investment choices available. However, unless they are fully utilising these investment choices, they may benefit from moving to a platform pension investing in a portfolio of collectives. Reviewing suitability of contracts in a wider marketplace than that which existed when the original decision was made could create significant long term cost savings, and therefore benefits for clients.
Adrian Walker, Skandia’s pension expert, comments:
“As the flexible drawdown market has developed, alternative fee structures have become available which should inform the advice review process for any client with such investments. Delivering a cost- effective solution will mean that clients can benefit from lower on-going charges on pension savings.
“We have already seen significant demand for flexible drawdown business on our platform and I’m confident that now being able to accept flexible drawdown transfer business to our product will accelerate that demand.”
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