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Now Norwich Union says stakeholder is a failure

Former stakeholder champion Norwich Union has branded stakeholder a failure and says it is to focus on lucrative big group schemes.

Executive chairman Philip Scott says Government policies give providers perverse incentives to seek out wealthier customers.

He accepts there are many policies on which the company will never make money and says commission will have to come down. He repeated that NU may choose not to offer the Sandler stakeholder suite if the 1 per cent cap stays. The company spent £10m advertising stakeholder – more than the Government – and is a market leader.

Scott says: “We reduced commission in April but still feel they are too high. We will focus on larger schemes and larger contributions. We have not seen any significant encouragement from Government. Unless there are changes, stakeholder will not change the savings pattern in the UK.”

Scottish Equitable manager of business development Steven Cameron says: “It is very important that the industry begins to talk in realistic terms about underlying financials, particularly when we could be seeing the extension of the price cap. A lot of the population becomes unviable to sell to.”

Wentworth Rose chief executive Philip Rose says: “Individual stakeholder is dead in the water. It is a niche product for high-networth tax planning.”

A Department for Work and Pensions spokesman says: “There are bound to be companies that will drop out and others that come in.”

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