True Potential calls for charge cap on income drawdown

Annual charge should be 0.75%, says platform

clock • 2 min read

Online investment platform True Potential Investor is calling on the government to introduce a 0.75% annual charge cap on income drawdown pensions in a bid to see more people benefit from last year's pension reforms.

The reforms, which came into effect in April 2015, have given all defined contribution savers over the age of 55 unfettered access to their savings. Recent figures from the Association of British Insurers (ABI) revealed £2.9bn of income-drawdown payments and £3bn of lump-sum payments were made in the first nine months following the changes. Research from True Potential, which polled more than 4,000 over-55s, found more than two-fifths (42%) of those taking cash out of their pensions reinvested it in property. Applying that percentage to the ABI figures, the platform calculates some £800m...

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