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Aegon calls for PADA to implement dual charging structure

Aegon is calling for the personal accounts delivery authority to implement a charging structure for personal accounts that combines a percentage contribution charge with an annual management charge.

Aegon says it is the best way to safeguard member interests and minimise taxpayer subsidy.

The provider adds that a flat annual management charging structure would put the personal accounts scheme under great financial pressure and could mean increased charges, more taxpayer subsidy or the scheme closing.

Head of business regulation Steven Cameron says: “PADA must give priority to the long-term financial security of the personal accounts scheme and a dual charging structure is the best way to achieve this. In the current climate people are more risk averse and want to know their money is safe. We can’t afford another crisis of confidence in the savings arena.

“Personal accounts are too big to fail so the taxpayer will ultimately have to step in if things go wrong. To reduce the risk of this happening the charging structure chosen must match when costs will be incurred as closely as possible.”

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