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Inertia brings NU contracting-in move

Norwich Union is to contract back in its policyholders following a low response to a mailshot which suggested they consider doing so.

The firm mailed 253,000 contracted-out policyholders last autumn who were either serviced by NU advisers or had no IFA to advise them to contract back in but is concerned that it only received a 20 per cent response rate.

The response rate is higher than on to similar mailings by many rival firms but NU says it will send clients another letter, again outlin- ing the recommendation to contract back in and giving them six weeks’ notice to tell NU what they want to do. If NU gets no response, they will contract people back into S2P.

This follows a similar move by Resolution Life for the Royal & Sun Alliance policyholders whose funds it administers.

Hargreaves Lansdown head of pensions research Tom McPhail says many advisers, including his own firm, do not advise on contracting in or out as there is a lack of clarity on which route is best.

NU operations director Mike Kirsch says: “We are concerned about the high levels of customer inertia on issues such as this and believe the next logical step is to switch these customers automatically back into the state second pension and take the responsible approach for our policyholders.


Duffy on Mortgages

Television coverage of the general election was riveting and my missus was not at all impressed when I crept into bed at 3am after promising at midnight to be there “in 10 minutes, luv”. The dust now settled, I am, however, left with a stark sense of foreboding for our industry.


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