Advisers warned on income drawdown misselling

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Advisers could face regulatory repercussions if they fail to warn their income drawdown clients about the potential pitfalls of taking their tax free cash early.

Pension providers say there is a growing trend for consumers to take their pension commencement lump sum (PCLS) - commonly known as tax-free cash- earlier than ever before. But they are concerned some advisers are selling income drawdown purely on the basis of early access to tax-free cash without properly explaining the pitfalls. Client can currently access the cash at age 50 but this will be increased to 55 in April 2010. Since A-day, pension income options have become increasingly flexible, with large numbers of consumers now using income drawdown as a way of accessing their PCLS w...

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