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Aviva and Pru pledge to review pension exit fees

David Barral Aviva 480 new

Aviva and Prudential will review the exit fees charged on old pension policies following pressure from industry experts and politicians.

Skandia says it has no plans to scrutinise its back book, arguing that the terms of the contract were “fully disclosed” when these products were sold.

Aviva UK Life chief executive David Barral says: “We are going to look at the exit fees we have got in our back book. We do not believe this is a big issue for us but we are going to review it.

“If we find cases where the charge has not been made clear or is unfair to the customer, we will look to put them into the position they should be in.”

Prudential UK chief executive Rob Devey says the provider reviews its old pension policies annually to ensure the products offer value for customers.

He says: “Costs do need to be appropriate and we certainly have not seen the last of this debate. We feel confident about the spotlight being shone on costs but we do not want the debate to be completely dominated by that because low-cost with no performance will not generate anything for pensioners.”

A Skandia spokesman says: “Skandia is not currently considering a review of its old policies. Approximately 0.5 per cent of our policies are pensions with any kind of exit penalty.

“The terms of these contracts were fully disclosed at the point of sale and designed to exist for the lifetime of the product.”

Worlwide Financial Planning IFA Nick McBreen says: “This could be the tip of the very large iceberg because you are entering the realm of contract law. These charges might look excessive now but the world was a very different place 25 years ago when the products were sold.”

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