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L&G puts deferred Sipp at forefront of new suite

Legal & General is introducing a deferred Sipp and doubling commission on regular-premium business as part of a relaunch of its individual pension suite.

A single tiered charging and commission structure will be introduced across its range.

In a bid to bring in more attractive individual pension business, the minimum regular contributions to get commission have been doubled to 200 a month, with minimum single contributions raised from 1,500 to 10,000.

Commission is doubled on all regular-premium business, including stakeholder, sold with these contribution levels. This will equate to two rather than one month’s premiums as initial commission while level regular commission increases from 2 to 2.5 per cent.

All personal pensions taken out with a minimum 200 a month contribution will be set up as deferred Sipps.

The launch of a deferred Sipp beats Standard Life, which is planning a similar vehicle, to the market.

Initially, customers can invest in L&G in-house port- folios and funds from five external managers.

From April 6 next year, the L&G deferred Sipp links to Cofunds and holders can select from around 300 funds plus residential property through a tie-up with Countrywide. A fund of over 25,000 is needed to trigger self-investment.

The deferred Sipp carries an annual charge of up to 0.9 per cent but pension pots below 15,000 face an additional 0.5 per cent levy for either 10 years or until the pot surpasses that amount.

Retirement income direc- tor Tony Filbin says: “We exp- ect more than half of our business to come through the deferred Sipp in time and there is no extra charge for the Sipp functionality.”

Clancy’s Financial Planning director Jim Clancy says: “Deferred Sipps are a marketing ploy and most people will never build a big enough pot to make it worthwhile having the Sipp option.”

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