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Friends Life scraps active member discounts

Friends Life has moved to scrap active member discounts and will allow current clients to shift to a single charge at the current active rate.

The decision, confirmed in a London Stock Exchange announcement this morning, follows confirmation from pensions minister Steve Webb that AMDs will be banned from April 2016. Schemes set-up on a commission basis will also be outlawed for auto-enrolment from this date.

Under an AMD charge structure deferred members pay a higher fee than active members.

Friends Life says active member charges will be subject to a minimum of 0.35 per cent. This limit is lowered to 0.3 per cent if a five-year commitment is agreed.

Friends Life corporate benefits managing director Colin Williams says: “We have already started working with a number of our clients who proactively wished to move to a flat charge structure, at the active member rate, and we are now extending this offer to all of our clients with an AMD scheme.

“Due to the quality of our AMD portfolio and our relatively limited exposure we can make these changes for the benefit of our customers without a material financial impact on our business.

“We are aware that many AMD schemes in the market are on higher AMC terms and we are happy to consider offering a single AMC solution to schemes that wish to future proof ahead of the ban.”

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