Axa Sun Life is claiming a Government announcement allowing greater
income-drawdown flexibility will kill the self-invested personal pension.
It claims most Sipps are written to provide investment flexibility for
income-drawdown investors as a get-out clause for advisers if their initial
But it says investors rarely take advantage of this facility and in the
majority of cases, the flexibility of the Sipp is virt ually worthless.
Under the latest Government proposals, investors with personal pension
income-drawdown plans will be able to switch their funds to different
Axa Sun Life believes this puts a nail in the Sipp coffin. The company
recently launched the Retirement Solutions plan which is claimed to allow
investors to switch “seamlessly” between personal pensions, conventional
and with-profits annuities, phased retirement and drawdown.
Marketing manager Steve Muir says: “Sipps driven by the drawdown market
are dead because the conventional wisdom has been to use Sipps in case
there is a need to transfer from a drawdown provider.”
Sipp provider Pointon York senior technical consultant Eileen Imrie says:
“I take on board part of their argument but when a Sipp is done in a true
sense it provides much greater investment flexibility.”