Whitechurch Securities already provide discretionary fund management services to L&C’s Sipp product, the Simple Investment Sipp.
“Whitechurch run a choice of six separate investment strategies, covering a range of investment objectives and with risk profiles that can provide a solid and fundamental base for any clients’ investment portfolio,” Adam Wrench, head of product at London & Colonial said.
“We are pleased that they will soon be applying their talents to yet another product within the London & Colonial range,” he added.
LTA impact
L&C believe that the lowering of the life time allowance (LTA) for pension contributions to £1.0m (€1.32m, $1.43m) from £1.25m, which comes into effect from 6 April, will make transfers into Qrops increasingly attractive.
After the new limit comes into effect, pension funds which exceed £1.0m will be hit with fairly onerous financial penalties – up as much as to 55% on any excess. While funds transferred into a Qrop no longer count towards the LTA, and can continue to grow free of any heavy taxation.
L&C said in a recent note the Qrop option may also become more attractive to younger pension savers.
“When the LTA remained at £1.5 million the ‘trigger point’ at which such Lifetime Allowance planning might have been prudent would have been a fund value of around £1 million. Now that the LTA will be reducing to £1m, a ‘trigger point’ of £500,000 would seem more rational,” it said.
It pointed out that a client with a pension pot valued at £500,000 at the age of 40, under certain circumstance could see that fund grow to exceed the LTA before reaching the age of 55 – the earliest date at which they could legally hope to retire, and thus triggering a potential 55% penalty on the excess.
“For clients fast approaching or even exceeding the reduced LTA, a Qrops can prove to be the ideal way in which such potentially punitive penalties can be avoided,” L&C said.
