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MetLife cuts Tip charge and is set to add accumulation plan

MetLife is understood to be launching a new accumulation retirement product this summer and has reduced prices on its trustee investment plan.

The firm will be offering a pension product positioned alongside its decumulation Tip and has cut charges on the Tip by 0.45 per cent to boost sales. Hargreaves Lansdown pensions analyst Nigel Callaghan says he thinks that sales of the Tip have been very low due to high charges and believes the fees will be reduced further.

He says in the worst-case scenario, the plan would charge 1.85 per cent to invest in one of their funds in order to get the guarantee, a 1 per cent establishment charge for the first five years, 0.95 per cent annual charge and trail commission of typically 0.5 per cent, leading to a 4.3 per cent charge.

Callaghan says: “I have been told that they will be revamping or adding a new contract that will accommodate the accumulation stage. The charges on the retirement plan are pretty eye-watering at the moment. I do not know of any brokers selling it.”

MetLife head of product marketing Peter Carter says: “We have just reduced the charge on our Tip by 0.45 per cent. We do have plans to launch a new product this year but cannot say any more. These products have unfairly got this tag of being overly expensive. It depends on the type of guarantee that the client wants.”

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