Friends Provident has cut charges for existing personal pension policyholders as the introduction ...
Friends Provident has cut charges for existing personal pension policyholders as the introduction of stakeholder continues to impact the pensions environment.
The move ensures that current customers can benefit from the equivalent of stakeholder terms. Stakeholder's pricing structure will also be applied to some existing corporate pension policyholders.
Charges will be reduced to align with the lower charges stakeholder products incur. The charges will be reduced by 0.75% for pensions sold through IFAs. Before the changes, charges ranged from 3% to 10%.
Charges will be lowered on new individual pensions and minimum contribution plans, for existing contracted-out FSAVC plans, for individual regular premium personal pension Series 2 Plans and for the group's Flexi Plus Plans.
Policy charges will be removed and allocation rates increased for future contributions to negate the effect of the bid/offer spread.
For corporate pension schemes, Friends Provident will be undertaking a pension campaign. This project is aimed at helping intermediaries and employers with the implications of recent legislative changes in pensions, particularly the introduction of stakeholder pensions and the new defined contribution tax regime.
Friends Provident admitted that the cuts would have an effect on revenue but said that improvements in technology would enable the company to recoup some of the money through efficiency savings.
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Relates to 136 million transaction reports
Ceremony will take place 13 November