Advisers and their clients can use drip feeding to take money from a pension to achieve the level of income they want, as regularly as they want in the most tax efficient way. The new feature means advisers can:
• manage their clients’ level of taxable income
• use it as a mix of part tax-free/part taxable income or fully tax-free income
• set up automated income payments from the pension
• retain clients’ uncrystallised fund to allow for further growth or higher tax-free sums through later crystalisation
• retain more value in the pension fund that can be passed on, potentially free from inheritance tax or income tax.
David Thompson, managing director of business development and proposition, AXA Wealth, said: “The way people think about retirement has changed and it’s time the products we offer changed too. We’re offering advisers a compelling alternative to traditional drawdown for those clients that want to stagger the income they take.
“We’re all living longer, but not everyone wants to go from working full time to being fully retired. Instead, we’re increasingly seeing people reduce the hours they work and easing into retirement. But many don’t want to see their level of income drop, particularly as people are likely to be more active in the early years of retirement. We’ve already launched a LifePlanning toolkit that can give a clearer a view of financial planning. Now drip feed drawdown allows clients to take as much money from their pension as they want to to top up their income in the most tax efficient way possible, while leaving the rest of the fund invested with the chance of further growth. This gives people even greater flexibility to spend their money when and how they want to.”
Drip feed drawdown is available on AXA Wealth’s Retirement Wealth Account and The Personal Pension.
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