Our view

Nov 05 - UK: Norwich Union's initial comments on Turner Report

Gary Withers, chief executive Norwich Union Life, said: "The report contains some good concepts, particularly the idea of increasing flexibility of annuities*, and the simplification of the state second pension by phasing the removal of contracting out.

"But clarification is needed around the assumption that the National Pension Saving Scheme (NPSS) will be an unregulated product; not least because of the potential impact this has on equivalent private pensions products.

"With this in mind, we also question whether the proposed 0.3% annual management charge (AMC) figure is realistic if placed under the same regulatory burden the financial services industry currently faces.

"We also have significant concerns regarding the efficiency and quality of the planned Government-run National Pensions Payment System, where experience has shown that major problems can occur. There is a track record of the private sector being a more effective operator of such systems."

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*The proposals suggest that a cash limit should be applied on the amount which individuals are required to purchase an annuity at any age. This issue would need to be investigated properly before implementation to avoid potential negative affects on individuals.

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Notes to editors:

Norwich Union
Norwich Union is one of the UK's biggest insurers. It is a leading provider of life, pensions and investment products and one of the largest Financial Adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.

Norwich Union has strategic alliances with building societies and other leading UK brand names including CIS and The Royal Bank of Scotland Group. Norwich Union’s news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media.