AJ Bell has secured an amendment to the Government’s annuitisation legislation which will allow savers over 75 to align the income reviews for multiple drawdown pension funds held in a single scheme.
The firm says the change will simplify the valuation process and reduce costs for savers with multiple drawdown funds in a Sipp, Ssas or a personal pension.
The change was buried in the small print of last week’s Budget and will be included in the Finance Bill 2011, which is due to be published this week.
Under the previous rules, income reviews took place at the end of each fund’s “pension year” for people over 75, forcing anyone with more than one drawdown arrangement in a Sipp to undertake a series of individual reviews.
The Budget document says: “Savers who have reached age 75 will be allowed to align multiple drawdown pension funds under the same scheme so the funds can all be valued annually on the same date.”
AJ Bell technical marketing manager Gareth James says: “It is not unusual for individuals to have multiple drawdown arrangements under a single Sipp. This will cut the cost of administering these pension schemes because it reduces the number of review fees clients are charged.”