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Hargreaves predicts drawdown spike before tax year end

Hargreaves Lansdown says that self-directed drawdown investors are likely to take out 28 per cent more in pension cash this month – and 40 per cent more in April – as the end of the tax year approaches.

Fifteen per cent of all pension cash outs occur in March, Hargreaves estimates, after an analysis of the withdrawals trends of DIY drawdown customers.

The data, based on over 12,000 withdrawals from Hargreaves investors, shows the spike in March and April comes after a Christmas period where more people tend to withdraw to cover the cost of the season, but withdraw smaller amounts.

The firm says the data indicates that many DIY investors are thinking through tax consequences and not acting recklessly with their pension funds as many feared before the pension freedoms.

Hargreaves senior analyst Nathan Long says:  “Despite the pension freedoms being introduced at breakneck speed, there’s mounting evidence most pensions savers  are managing their money sensibly and are actively minimising their tax liabilities.

Rather than pulling money out irrespective of timing and tax implications, it seems many DIY pension savers are actually carefully managing their income according to their tax allowances. The FCA and the government are introducing valuable measures to further simplify the process of navigating retirement but in the meantime this is welcome evidence many people are perfectly able to manage their own affairs.

“Drawing from your pension investments is a riskier business than buying the guaranteed income of an annuity. Aim to hold at least one years’ worth of income as cash if you are using drawdown so you are not forced into selling your pension investments at a low point if the market falls.’


Tapering of annual allowance – adjusted and threshold income

The definitions of adjusted income and threshold income used to determine whether, and to what extent, someone’s annual allowance will be reduced can be confusing.  Here we try to make sense of it all. The annual allowance will be reduced for high income individuals from 6 April 2016.  Our previous article Tapering of annual allowance […]


Standard Life advice arm buys £230m Northern Ireland firm

Standard Life Aberdeen’s financial planning and advice business, 1825, has today announced it will acquire the wealth management arm of BDO Northern Ireland. BDO Northern Ireland was established over 25 years ago and has assets under advice of around £230m. Its wealth management team specialises in all aspects of wealth planning and support from corporate […]


Big firms steal march in top-rated adviser guide

Large firms have seen their representation increase in adviser directory VouchedFor’s annual list of top-rated financial planners. More advisers from the likes of True Potential, Foster Denovo, Origen, and Hargreaves Lansdown – which has around 100 of its own advisers – are represented in the list this year, VouchedFor says. The list features a total […]

Pensions-savings-retirement-piggy bank

Mothers missing out on millions

New HMRC figures show number of ‘mothers missing out on millions’ in pension rights has doubled in two years – Steve Webb Figures published on 24th March by HM Revenue & Customs show a doubling in the number of mothers missing out unnecessarily on vital pension rights because of a change in the rules on Child […]


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