Scottish Life has launched an income-release plan that enables clients to access their pension fund before retirement.
The plan provides a traditional income drawdown facility but also allows customers to withdraw tax-free lump sums without the need to take income and then continue to save for retirement.
Illustrations for the new product will be available to advisers from November 5, with new business being written from December 3.
The product also allows a client who elects to take planned income payments access to an “income tap” facility which transfers an agreed amount of money into a low risk fund while the remainder of the portfolio continues to be invested for longer-term income and growth.
Income release is available both for new plans and for existing pension portfolio and individual policyholders.
Scottish Life head of individual business Keith MacPherson says: “Technically speaking, income release provides an integrated unsecured pension option which allows the adviser and client to consider fully or partially crystallising the pension fund to provide a pension commencement lump sum and/or income, within a single plan.
“Put more simply, income release allows individuals to get a tax-free lump sum from their pension plan after the age of 50 (age 55 from April 2010) while still building up their pension fund. It means that a pension is no longer ‘locked up’ until you stop working.”