Back
Standard’s Sipp has a ‘formidable’
presence
Published: 6th January 2005
This article appeared in The Financial Adviser
STANDARD Life has already carved itself
a formidable presence in the Sipp market, according to one industry expert.
David Higgins, director of London-based
Glazers Financial Services, said the life company’s reputation had
given it a head start on the rest of the sector, and that by launching
its new self-invested personal pension plan with a heavy marketing campaign,
it would surely capture IFAs who have not previously done Sipp business.
He said: “I do not think Standard
Life will take much business away from the well established and well-known
Sipp providers such as James Hay and Winterthur Life, but its product
will be very attractive to advisers looking to break into the Sipp market
– they all know the Standard Life name well.”
Mr Higgins said it was clear that Standard
Life had carefully researched the Sipp market before creating the new
product: “They are nobody’s fools – Standard Life has
looked at the market and priced it accordingly. What will be interesting
to see is how its service element turns out.”
Demand for Sipps is expected to sharply
increase in the next year or so in the lead up to A-day.
Standard Life’s Sipp, previously administered by James Hay, is now
taken care of in-house. The product’s features include immediate
basic-rate tax relief on customer payments and flexible income options,
including ‘dripfeed drawdown’
This is a feature that allows customers
to minimise the income tax payable on pension income.
From April 2006, the Standard Life Sipp
will offer residential property as a pension asset. This will avoid any
liability for income tax on rental income or capital gains tax on disposal
of the property. It will also have the potential to create a ‘family
Sipp’,
which would allow pension assets to be passed to subsequent generations.
There would be no requirement to buy an annuity by age 75.
A competitive charging structure with significant discounts for larger
amounts invested is offered in Standard Life’s Sigma fund range.
A single, straight forward annual management charges applies if the customer
invests solely in the Sigma range of pensions funds. The level of charge
depends on the fund chosen, with many funds available at one per cent
a year and no charges higher than two per cent.
For customers with large amounts invested
in Sigma pension funds, some of the charges will be rebated. The level
of rebate varies form 0.3 per cent a year for funds over £500,000.
Rebates are paid in the form of adding extra
units to the customer’s fund on a monthly basis. Additional charges
apply if the customer chooses to self-invest.
|
