Article date: 12 July 2005
Following the introduction of modifiedstakeholder pensions in April, Norwich Union has carried out areview 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 to1.5% will follow towards the end of the year.
The FSA’s recent consultation on theremoval of the RU64 rule will ultimately benefit both consumers andthe industry. Norwich Union believes its removal will providegreater access to personal pensions and will give a greaterstimulus for the provision of advice to this market.
The commission changes are as follows:
Individual Your Pension Select (Fulladvice pension)
Commission will be increased on single premium business from amaximum 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 paymentbusiness from 10% Lautro plus uplift to 40% Lautro plus uplift
Iain Oliver, head of pensions said: "We havecarried out a review of both our pricing and commission and as aresult will be increasing our commission rates. Initially we aremaintaining our prices on the modified stakeholder pension at orbelow the 1% annual management charge and expect to increase thisto the new stakeholder cap of 1.5%* towards the end of theyear."
"The proposed removal of the RU64 rule willprovide greater access to personal pensions and we remain committedto providing products that give the opportunity for full advicethrough a transparent charging structure."
Press office contacts:
Louise Soulsby01904 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 onrequest
- RU64 also known as FSA Regulatory Update 64/COB22.214.171.124(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'slargest provider of life, pensions and investment products andone of the leading Financial Adviser (FA) providers. FAs providearound 75% of the company's long-term savings business in theUK.
- Norwich Union has strategic alliances with building societiesand other leading UK brand names including Tesco PersonalFinance and The Royal Bank of Scotland Group. NorwichUnion’s news releases and a selection of images areavailable from Aviva's internet press centre at www.aviva.com/media