Scottish Life, the pensions specialist arm of the Royal London Group, is planning to launch an Income Release plan that allows institutes of financial accountants and their clients to maximize the flexibility provided by A-day rule changes, as well as to provide a traditional income drawdown facility.

Integrated within Scottish Life’s pension portfolio proposition, Income Release will allow customers to take a tax-free lump sum without the need to take income and then continue to save for retirement. The new plant will also give opportunity to accumulate as well as decumulate.

In addition the product will include an innovative Income Tap facility that transfers an agreed amount of money into a low-risk fund, while the remainder of the portfolio continues to be invested for longer-term income and growth. Once the Income Tap has been set up, it can be automatically topped up at an agreed frequency to help secure ongoing income payments.

Income Release is available both for new plans and for existing pension portfolio and individual policyholders. There is no minimum for the amount that can be taken in cash. There is no designation charge to take income or cash if the initial fund value is over GBP40,000. Further charges would be deducted from the plan to cover the advice costs for Income Release, where a customer has agreed a commission remuneration payment with their adviser.

Keith MacPherson, head of individual business at Scottish Life, said: Technically speaking, Income Release provides an integrated unsecured pension option which allows the adviser and client to consider fully or partially crystallizing the pension fund to provide a pension commencement lump sum and/or income, within a single plan.