Fidelity International launches PEP and ISA withdrawal facility

ISA and Pep investors can now take a regular “income” from their funds without forfeiting any of the tax benefits following Fidelity International’s extension of its withdrawal facility to these tax-efficient plans.

Ideal for savers approaching or at retirement, the new facility enables ISA and Pep holders to take a set monthly or quarterly “income” from their investments. Investors in growth funds without distributions can now opt for a regular fixed amount to be paid as capital withdrawal without encashing their whole investment or losing any of the tax benefits available through ISA investing.

The facility, available on unwrapped funds since August 2006, is being extended to all Fidelity funds ISA and Peps as well as other providers’ funds registered on FundsNetwork.

Richard Wastcoat, UK Managing Director at Fidelity International, comments: “We expect more investors to want an income from their savings as they approach retirement. Holders of growth funds no longer need to sell or switch to another product just because they want a regular income. This facility gives investors greater flexibility and, with longevity increasing, could be ideal for those who want to keep their savings invested in the stock market during retirement.

“ISAs and Peps have both been popular investment vehicles. In fact, more than 17 million people have ISAs and £220bn has been invested since their launch in 1999. At a time when more people are being asked or forced to take increasing responsibility for their own retirement income, we believe that making regular withdrawals available from ISAs and Peps across all funds on FundsNetwork will be of great help to many investors.”

Fidelity’s free withdrawal plan is available on all Fidelity funds and all third party funds on FundsNetwork. There is a minimum amount of £50 per fund per withdrawal but no maximum. The minimum holding in a fund is £1,000. Withdrawals can be made monthly or quarterly and are paid directly in to the investor’s bank account. Investors can stop and start the plan at any point. Where regular withdrawals are taken from an investment, it may reduce the capital over time if the fund’s growth does not compensate for the withdrawals made.