Prudential has signalled its intention to build a bigger presence in the individual pensions market by adding a deferred sipp to its retirement funds proposition.
Creation of the deferred sipp, launched today, is the next development in Prudential’s drive away from a mainly ‘decumulation’ market position to offer an end-to-end flexible retirement plan proposition, says the Pru’s intermediaries director Tudor Taylor.
On the addition of the sipp product, a pension holder is now able to buy a simple pension plan and shift the funds into the flexible retirement plan self-invested fund at a later stage in their life - along with other assets such as bonds, shares, collective investments and commercial property – as well as eventually move into drawdown at retirement, as the life office intends to launch a drawdown proposition in 2007.
“We have been relatively quiet in the individual pensions market for a number of years and have been very coy about showing our hand, but no matter at what stage in their career they are, people need a joined-up pensions policy,” says Taylor.
“We have introduced a range of retirement solutions from pensions through to annuities that caters for the different life stages that customers go through. Customers and advisers can use Prudential’s retirement solutions package as a one-stop shop for their retirement needs.
“And we have positioned it so it stands head and shoulders above the competition as we want to grab significant market share over the next 2-3 years, but the main change is more about the concept than the details,” adds Taylor.
The plan, which will only be sold through the intermediary market, has service administration supplied by Suffolk Life, and enhancements have also been made to Pru’s online system in relation to quotations, valuations and servicing and through the plan’s link to the Cofunds platform the policyholder is given access to 800 funds.
Taylor says the charges paid over the term of the policy should be much lower to the client and should also reduce the longer the policy is held as the number of additional charges generated by the transfer from a pension to a sipp to drawdown and then an annuity are reduced if funds remain within the one firm.
Additional service delivery provides access to 150 discretionary managers and a flexible commission facility is also offered so intermediaries can decide how they want to be remunerated, says Taylor, and which can, for example, display the information as a monetary amount, a percentage of contribution and fund-related commission.
A team of specialists on the technical aspects of pensions and transfers is also on hand at the Pru as part of the proposition, to deal with intermediary technical questions.
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