CGU is setting up a group and individual pre-stakeholder pension but is
avoiding the phrase “stakeholder-friendly” because it fears it could
The company says its plan, called Your pension @ CGU, plan meets all the
Government's minimum requirements for stakeholder com- patibility in terms
of its char-ging structure and flexible contribution levels.
CGU believes the term stakeholder-friendly challenges issues of disclosure
in the pre-stakeholder phase as consumers are confused over its true
There are no charges on the products until after stakeholder launches in
Switching to stakeholder after April 2001 will also befree, after which a
reducing scale of annual management charges will operate, with bigger
pension funds charged at lower rates.
Customers will pay a 1 per cent of fund value charge, reducing in steps to
0.8 per cent a year for funds over £50,000, or 0.6 per cent reducing
to 0.4 per cent a year for fee-based advice.
CGU is expecting a high take-up of the product because of its special
offer and simplicity, meaning IFAs will find it easy to explain the
benefits to their clients.
CGU says its directors are making it clear the product will “make it
through the merger” and will carry on under the new Norwich Union brand
aftera single marketing group is established this autumn.
CGU spokeswoman Fran Elliott says: “We have avoided the tag
stakeholder-friendly because we wanted to be specific about what we are
offering. We wanted to avoid confusing consumers with words which are not
Pensions Brief, p61