Winterthur Life has reduced the charging structure on its multi-manager personal pension to make it ...
Winterthur Life has reduced the charging structure on its multi-manager personal pension to make it competitive against stakeholder products.
The group has removed the 1% regular contributions charge on the product. It estimates this makes the reduction in yield on the pension considerably less than that on a standard product charging 1%.
The only costs on the plan will be an initial charge of £130 and an annual fee of £80. Charges on the underlying funds in the Winterthur range vary.
Assuming a 20-year term and a fund growth of 7%, reduction in yield will amount to 0.63% on a single contribution of £25,000, compared to 1.07% for a pension with a 1% only charge. Regular monthly contributions of £500 would lead to a reduction in yield of 0.51%, while a standard 1% charge would result in a 1.07% reduction in yield.
The Winterthur projections assume the Schroder Managed fund has been used. This has a management charge of 0.25% each year with an additional 0.05% in expenses. The group said its third-party fund range includes funds with charges that were both higher and lower than this.
Mike Kellard, sales and marketing director at Winterthur, said: 'This product puts us well ahead of other providers on combining top class multi-manager products with charges that compare extremely well to potentially more expensive stakeholder alternatives.'
The new charging structure will take effect from 1 July 2001 for new and existing business.
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