As reforms loom next month...
Pensions: Standard Life opts for full flexibility
The company is also offering what it calls “comprehensive support” online and on the phone to ensure customers understand their options.
Customers will have access to their pension money in any way they choose, from full cash withdrawal to flexible drawdown and access to an annuities panel for a guaranteed income option.
They will be able to use intuitive online models to play with different scenarios, helping them to fully understand the impact and things they need to consider before making decisions.
· Flexible Drawdown: Standard Life has applied its drawdown capability to its personal pension – Active Money Personal Pension (AMPP) – giving customers access to a wide range of investment options and creating an easy, flexible way for customers to access their pension savings. This is available via a simple transition from both workplace schemes and older style pensions for those customers not already saving in an AMPP.
· Annuities: a panel of providers has been selected from the whole of the market, including enhanced annuities for people with health problems. The company will continue to actively promote the Open Market Option.
· Cash: Customers can opt for full cash withdrawal and the money will be in their bank account within days. Clear warnings will be given to ensure customers understand the risk of not being able to provide for their income needs in retirement.
· Charges: From April, customers bringing their pension pots to Standard Life for the purposes of drawing cash or income can typically expect to pay a single annual management charge of 1%. This is a ‘bundled’ charge, which includes the cost of the underlying pension product, investment solution, online and telephone administration services and retirement roadshows. There are no additional charges for full encashment of funds.
Jamie Jenkins, Standard Life Head of Pensions Strategy, said: “We already had the products in place to enable customers to benefit from the new freedoms. For example, we manage 57,000 income drawdown policies worth £11bn, paying out more than £370m of income a year to our customers.
“This has meant we’ve been able to focus on delivering the right support to ensure customers engage with and understand their options. While the new regulations give customers greater control and flexibility around how they access their benefits, the increased choice adds complexity.
“Customers need to fully understand the impact and what they need to consider before they can be confident that they are making the right choice. To complement the Government’s Pension Wise initiative, we’re providing integrated online and phone support, taking every opportunity to make the information real and relevant.”
Mary Harper, Standard Life Head of Customer & Digital Marketing, said: “We’ve worked with experts based in the US who specialise in translating complexity to develop a new, user-friendly online journey and tools to engage customers with the choices available to them and enable them to transact. It has been developed using a test and learn approach with customers and will continue to evolve and adapt based on actual customer behaviour.”