Retirement software firm Dunstan Thomas has created a new system that allows pension providers to offer savers uncrystallised funds pension lump sum withdrawals.
The new option, revealed by HMRC in August, will allow scheme members to take a portion of their pot as a lump sum, with 25 per cent tax-free and the rest subject to income tax.
These withdrawals will not force the member to allocate the rest of their fund to a drawdown vehicle or an annuity within six months of taking their tax-free lump sum.
Dunstan Thomas will add the UFPLS capability to its Imago Back Office pensions administration function. The capability will be added as a separate module, meaning users can choose to pay just for the new withdrawal option.
The firm says UFPLS will be available to new and existing Imago licensees for initial testing from January 2015, although the new withdrawal option will not be available to savers until April.
Dunstan Thomas managing director Natanje Holt says: “We wanted to offer a cost effective and seamlessly integrate-able solution to a wider cross-section of providers, including those not offering drawdown policies today and not planning to do so in the near future.
“Some providers just want to offer policyholders more flexible access to retirement funds once they have reached the age of 55.”