In the Budget announced just last week, the Government revealed that from today, customers in flexible drawdown need only show they have £12,000 in guaranteed income to be eligible (down from £20,000), and capped drawdown maximum income would be increased to 150% of GAD (up from 120%).
The changes required some significant system changes for retirement income providers, but Skandia has been able to deliver the changes today. This means that, in accordance with the Government’s announcement, existing drawdown clients will move to 150% 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% immediately.
In addition, clients who are able to demonstrate the lower amount of £12,000 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 Friday 28th March.
Adrian Walker, retirement planning manager at Skandia, comments:
“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.”