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Interactive Investor scraps monthly income drawdown fee

Investing platform Interactive Investor has announced plans to scrap and change a number of costs from its investment and Sipp service from 1 October.

The biggest change for pension investors is the removal of its monthly income drawdown fee, however, customers hoping that its £10 per month Sipp fee that amounts to £120 a year on top of its monthly platform fee have been left disappointed.

The £10 per month Sipp fee is currently beign waived until April 2021 for those who open an  before 30 September.

Interactive Investor will scrap and change a number of pension related costs from 1 October

The tweaks from II are the latest in a string of fee changes the platform has made in recent years, having permanently removed its exit fees in 2018, introduced a flat-fee monthly subscription starting at £9.99 last year and scrapped its 99p flat fee levied on regular investments earlier this year.

Interactive Investor's flat charging structure jaminan bpkb mobil bunga rendah is aprticularly beneficial for investors with large pots, compared to percentage of investment-based fees, such as rival , although it charges no extra fee for Sipp accounts.

The latest change comes with the aim to simplify the firm's pricing, create better value and help make investing simple.

Most of the alterations relate to the Interactive Investor Sipp, where a number of administrative charges are to be removed.

The monthly £10 income drawdown fee will be scrapped, along with nine other administrative costs.

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For example, there will no longer be a charge for the alternative method to drawdown of taking cash out of pensions, so called UFPLS (uncrystallised funds pension lump sums), where the first 25 per cent of all sums taken out is tax-free.

This method introduced by the pension freedom changes allows investors to keep their pension invested in a Sipp and take out money after the age of 55.

Pension sharing and annuity purchase fees will also be removed by II.

The costs association with pension sharing on divorce, payment of death benefits, review of capped income drawdown and annuity purchases have also been removed.

Sipp investors pay £10 per month for their self-invested personal pensions, along with a service plan charge, ranging from £9.99 to £19.99 per month depending on whether you have an 'Investor', gadai bpkb bunga rendah 'Funds Fan' or 'Super Investor' account.

This flat fee model was introduced last year and also gives customers access to a trading account, a stocks and shares Isa, and as many free junior Isas they have children.  

Meanwhile, within the plans themselves, the cost of trades between £100,000 and £500,000 has increased by £4 to £40 for the Super Investor plan, but has remained at £40 for the Investor and Funds Fan plans.

The cost of trades worth £500,000 or more have now reduced to £40 across all plans while the cost of making an urgent sterling withdrawal worth over £100,000 has dropped from £25 to £15.