Following the introduction of modified stakeholder pensions in April, Norwich Union has carried out a review of its pricing and commission rates on individual pensions.
Following the introduction of modified stakeholder pensions in April, Norwich Union has carried out a review of its pricing and commission rates on individual pensions. As a result commission rates are to be increased from 18 July 2005. An increase in the price cap on the modified stakeholder pension to 1.5% will follow towards the end of the year.
The FSA’s recent consultation on the removal of the RU64 rule will ultimately benefit both consumers and the industry. Norwich Union believes its removal will provide greater access to personal pensions and will give a greater stimulus for the provision of advice to this market.
The commission changes are as follows:
Individual Your Pension Select (Full advice pension)
Commission will be increased on single premium business from a maximum level of 5.5% to a maximum level of 6.2%.
Individual Your Pension (Stakeholder)
Commission will be increased on single premium business from 2.5% plus uplift up to 5.04% plus uplift
Commission will be increased on regular payment business from 10% Lautro plus uplift to 40% Lautro plus uplift
Iain Oliver, head of pensions said: "We have carried out a review of both our pricing and commission and as a result will be increasing our commission rates. Initially we are maintaining our prices on the modified stakeholder pension at or below the 1% annual management charge and expect to increase this to the new stakeholder cap of 1.5%* towards the end of the year."
"The proposed removal of the RU64 rule will provide greater access to personal pensions and we remain committed to providing products that give the opportunity for full advice through a transparent charging structure."
-ends-
Press office contacts:
Louise Soulsby 01904 452617 Out of hours 07800 699526
Cheryl Cox 01904 452791 Out of hours 07800 699275
David Gwyer 01904 452828 Out of hours 07800 699508
Rob Pell 01904 452659 Out of hours 07800 699563
Notes to editors
- For policies sold post 13.12.04
- Further details on the commission levels are available on request
- RU64 also known as FSA Regulatory Update 64/COB 5.3.1.6(3)
* Stakeholder charges for new policies will be a maximum of 1.5% p.a. for the first 10 years and then a maximum of 1% p.a. thereafter
- Norwich Union is the UK's largest insurer. It is the UK's largest provider of life, pensions and investment products and one of the leading Financial Adviser (FA) providers. FAs provide around 75% 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 Tesco Personal Finance 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