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Cap increase needed to incentivise providers – Smith

The Government&#39s price-capped medium term investment product and pension product will both carry a maximum annual management charge of 1.5 per cent for the first 10 years that the product is held and 1 per cent thereafter.

A statement from Department for Work and Pensions secretary of state Andrew Smith says the increase in the charge is needed to incentivise providers to market products to the public.

Smith says: “The new structure will incentivise providers to market the new stakeholders more actively, and continue to guarantee a very good deal for the customer. Because the charge falls after 10 years, people will be encouraged to save for the long term.”

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