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Aegon to apply auto-enrol charge cap from August

Aegon is to apply the 0.75 per cent charge cap to all new auto-enrolment business written from 31 August.

Last month, pensions minister Steve Webb confirmed any scheme with a charge above 0.75 per cent would not be eligible for auto-enrolment from April 2015.

Aegon has moved to introduce the charge cap early, but says only schemes going through their initial auto-enrolment assessments after 31 August will receive the new terms.

The insurer says it has a significant number of employers in their final stages of auto-enrolment and does not want to “unsettle” these firms at this late stage.

Aegon workplace solutions managing director Angela Seymour-Jackson says: “Now we have clarity on the level of the price cap and other charge restrictions, we want to work with employers and their advisers to plan ahead, drive value for customers and continuing to make a success of auto-enrolment.

“We will be carrying out a comprehensive review of our existing pension schemes in the coming weeks, and can reassure employers and advisers, that we will work with them to transition to DWP-compliant terms.”

Scottish Widows is implementing the charge cap for new members this month ahead of a “comprehensive review” of the provider’s existing book of business.

Last week Standard Life said it would impose a £1,200 a year fee on small employers who have agreed auto-enrolment terms with the provider above the 0.75 per cent charge cap. Aegon is also considering imposing employer levies for schemes with charges above 0.75 per cent.

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