View more on these topics

MVR move keeps WP option for stakeholder

Product providers will be able to continue to offer with-profits within stakeholder pensions after amendments to DWP regulations accepted the need for MVRs to be calculated outside the charge cap.

The ABI and individual companies have been lobbying the Government after fears mounted that MVRs would have to be included within the 1.5 per cent charge cap from April 6.

The new rules are a continuation of the existing regime but providers were concerned that any change would effectively have killed off with-profits as a stakeholder pension investment.

Norwich Union head of pensions Iain Oliver says the industry convinced the DWP that MVRs were essential to the smoothing process rather than a back-end charge. NU is particularly relieved as it is one of the few insurers to offer with-profits as its stakeholder default fund.

The DWP has said it will not proscribe the wording of the pros and cons of lifestyling, a message that providers must deliver to investors between two years and no less than four months before it starts – five years before retirement. This means that providers themselves will be left to design their own lifestlying products as well as the way they are communicated to consumers.

Members leaving a 1 per cent scheme for any reason and later rejoining after the charge cap rise comes in next month will be subject to the 1.5 per cent charge, as they will be deemed to be new customers and not continuous members.

Oliver says: “It has been pretty uncertain and it is interesting we have managed to satisfy the DWP that an MVR is an adjustment of inv-estment performance and not a back-end charge.”


Evolution or revolution?

When guaranteed critical-illness cover rates started to rise a couple of years ago, some providers predicted that the industry would have to develop a completely new product model if this type of cover was to survive.

New Star to Manage Exeter Fund

New Star has bought the Exeter Financials Fund and its manager from Exeter Asset Management. It has paid Exeter to release both the fund and Nick Brind, the funds manager, from his employment contract. The board of the fund is expected to change the name of the fund, with Brind joining New Star in early […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm