Sipp provider AJ Bell has argued the government's announcement of a 26 March launch date for the reinstatement of the 120% limit for drawdown could leave some savers waiting up to 14 months before they can reap the benefit.
The government yesterday revealed that the reinstatement of the drawdown limit to 120% of the Government Actuary's Department (GAD) rate would take place on 26 March. The government had lowered the limit to 100% of the GAD rate in April 2011, sparking protests from pension providers including AJ Bell, who claimed the move unfairly punished savers.
AJ Bell said the timetable for the introduction of the change would leave many savers with a long wait to benefit. 'Individuals with a review due on 25 March 2013 will not benefit from the uplift and will have to wait 14 months, until 25 March 2014, to have their benefits reviewed using the uplifted terms,' it said.
Chief executive Andy Bell (pictured) said the government had placed the needs of savers 'at the back of the queue'.
'It would have been simpler, and better for pension savers, to just allow pension providers to disregard the reduction from 120% to 100% of GAD factors introduced in 2011,' he said. 'Then all drawdown investors could have had the immediate benefit of this relaxation, subject to their pension provider’s system capabilities. Instead some of our clients will have to wait for over a year for this relaxation to take effect.'