View more on these topics

Axa targets Sipp at families

The Family Suntrust from Axa Winterthur Wealth Management is a group self-invested personal pension for up to 12 people.

The plan allows groups such as families or business partners to invest together with a combined minimum investment of £200,000. This minimum is subject to a £1,000 minimum investment for each individual Contributions up to £3,600 a year made by individuals benefit from  relief, and even non-taxpayers will get basic rate tax-relief.

Pooling money with others in a range of investments that are managed as one portfolio, known as the pooled fund, can open up access to assets such as UK commercial property. However, investment choices must reflect the investment objectives and attitudes to risk of the group as a whole.

The investment options include a discretionary fund manager, who can manage a portfolio on behalf of investors. The Premier investment offshore investment bond is another option, which provides access to a range of investment funds and individual shares. Investors can choose other offshore and onshore bonds, stocks and shares, trustee investment plans and UK commercial property.

There is also a range of retirement benefit options. Investors can use their share of the pooled fund to buy a lifetime annuity from Axa or another provider under the open market option. Once selected, this option cannot be changed.

An unsecured pension option can provide income withdrawals up to the age of 75 if the investor’s share of the pooled fund is at least £50,000. From age 75, a limited form of income withdrawal is available through the alternatively secured pension option. Both USP and ASP accept protected rights and can be converted to a lifetime annuity or the scheme pension option.

With the scheme pension option, investors can exchange their share of the pooled fund, subject to a £100,000 minimum, for a regular income for the rest of their life. However, it is not available to protected rights and once selected, it cannot be changed.

This product could be useful for some clients such as family businesses, but a potential drawback is that each person in the scheme may have different investment objectives and attitudes to risk. This plan can only work on the basis that one strategy fits all, so the group investment strategy of this product may differ from those that investors would choose on an individual basis.



News and expert analysis straight to your inbox

Sign up


    Leave a comment