London, 15 August 2008 – Investors could miss out on the benefits of consolidation if they fail to take advantage of the new ability to transfer protected rights come the 1st October 2008, says Fidelity International.
For investors who want to prepare early for transferring their protected rights or open a Personal Pension or SIPP with protected rights, Fidelity is set to take applications from mid September - two weeks ahead of when the new regulation comes in.
By transferring to a fund supermarket SIPP or Personal Pension specifically, investors can enjoy five key benefits:
1.
Consolidation: Investors can take a holistic and more strategic approach to managing their pension assets, while seeing them in one place, alongside their other investments;
2.
Investment choice: a wider choice with access to top performing funds online;
3.
A chance to review: Protected rights have often been the smaller portion of many plans and as a result have been sometimes under-utilised or overlooked;
4.
Savings in time & cost: one set of costs within one overall plan;
5.
Control: Investors will have greater access and control when it comes to their retirement planning.
David Dalton-Brown, Head of Fidelity’s Direct Business said: “Investors will no longer have to suffer the frustration of having to split out non-protected rights funds or avoid transfers with any elements of protected rights.
“In fact, this further relaxation around protected rights rules presents investors with a significant opportunity. They will soon be able to shake the frustration felt since A-Day, that while protected rights became more attractive and flexible, they could not be held in the most flexible pension vehicles– SIPPs. For some it has even meant keeping two separate funds for income drawdown.
“Now, by transferring to a SIPP on a fund supermarket, investors can take advantage of all of the benefits of consolidation – saving them both time and money, as well as offering them added benefits such as better investment choice and being able to access income drawdown.”
Protected rights are the funds built up by being ‘contracted out’ of the State Second Pension (S2P). Protected rights funds used to be subject to various restrictions which have been gradually removed since A-Day. One of the remaining obstacles - holding protected rights within a SIPP – will be removed on the 1st October 2008.
FIL Limited (“FIL”) and its subsidiary companies serve the major markets of the world by providing investment products and services to individuals and institutional investors outside the US. FIL Limited manages a total of £129.5 billion of assets*.
Notes to editors:
* Source: Fidelity/Morningstar UK Retail Prices Index (RPI) April 1999 to 3 March 2008
**Source: Fidelity as at 31.12.07
FundsNetwork, Fidelity’s fund platform, was launched in June 2000. It offers advisers and their clients the ability to invest, manage and monitor their investments in one place, bringing them control, efficiency and new business opportunities. The FundsNetwork service is offered and managed by Financial Administration Services Limited. FundsNetworkTM is a trademark of FIL Limited. The Fidelity ISA is offered and managed by Financial Administration Services Limited. The value of tax savings and eligibility to invest in an ISA will depend on individual circumstances and all tax rules may change in the future. Any opinions expressed are made at the time of writing and can be subject to change without notification. The value of investments and the income from them can go down as well as up and an investor may not get back the original amount invested. Investors should also note that the views expressed may no longer be current and may have already been acted upon by Fidelity. Assets as at 31.12.07 are those of FIL Limited (FIL).
