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Minister says firms competing under 1%

New pensions minister Ian McCartney says the debate on stakeholder is no

longer about 1 per cent but about how low charges can go.

In an exclusive article for Money Marketing, McCartney says stakeholder is

“exerting a powerful and positive influence”. He says the debate is

“focusing on how low providers can go, with schemes being set up with

charges significantly below 1 per cent”. He adds that the public needs the

right advice on pensions.

Influential analyst Ned Cazalet has predicted “stakeholder slaughter ” as

life companies struggle to cope with the poor profit profile which could

lead to “widespread destruction of policyholder and shareholder capital”.

McCartney says 94 per cent of employers are aware of their stakeholder

responsibilities although the Federation of Small Businesses is to arrange

an urgent meeting to ask for an extension to the deadline.

Informed Choice managing director Nick Bamford says: “You must charge at a

commercial level to provide a commercial service. To think that you have

low price together with quality service is dangerously naive. But the signs

are there that providers are already designing products to go below 1 per

cent.”

McCartney article, p8

DOCE:

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