An adviser has hit out at Prudential after it said it will levy a 20 per cent market value reduction on a member’s with-profits fund if the money is switched to a different Pru product.
Caliber Financial Management IFA Paul Ormerod says his client wants to shift a £10,000 personal pension to a phased income drawdown product to release funds before his selected retirement date. The Pru says it needs to process a product switch, triggering a 20 per cent MVR across the entire fund.
Ormerod says: “Instead of just charging the MVR to the tax-free element which is leaving Prudential, it is charging the MVR on the full £10,000, even though 75 per cent of the money is being kept by Prudential.”
A Prudential spokesman says: “When moving money from a personal pension into income drawdown, it must be disinvested equally across all underlying funds, as a result of which the client will incur an MVR.
“Waiving an MVR would ultimately be penalising other members of the with-profits fund.”