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Drawdown flexibility could kill off Sipps

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


choice underperforms.


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


providers.


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.”

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