View more on these topics

NOW: Pensions unveils charging structure

NOW: Pensions has revealed details of its charging structure as it prepares to rival Nest ahead of automatic enrolment.

The multi-employer trust-based defined-contribution scheme, which is backed by Danish pension scheme ATP, will charge members £1.50 per month for administration plus a 0.3 per cent annual investment management charge.

The pension scheme will operate a single investment strategy which it says “performs and protects”. The strategy will be based on a managed diversified growth fund, a retirement protection fund and a cash protection fund.

NOW: Pensions chief executive Morten Nilsson (pictured) says: “We believe auto-enrolment is a wake up call to the UK pensions industry, and ATP’s experience in servicing virtually the entire Danish working population and proven track record shows there is another way.

“We have been providing Denmark’s working population with stable, consistent returns over the past 45 years, no matter how volatile the economic climate, and we are confident we can do it here.”

The Government-back Nest pension scheme will levy a 1.8 per cent charge on member contributions in addition to a 0.3 per cent AMC.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. As you all know I am always criticising pension charges.However on this particular occasion I am going to surprise you and I am going to make a positive comment.Now which is backed by Danish pension scheme will charge members £1.50 per month for administration and a 0.3 AMC.I find this to be totally acceptable.NOW -Pardon the pun is the time for all other pension providers to shine and match these charges.

  2. Lesley, other pension providers will match these quite easily.

    Have a look at the sums….someone with 10k fund, having contributed for 5 years say would be paying an effective amc of 0.5%

    So not particularly challening…..but what they do about people paying 250pa is the interesting question

    They pay for 2 years….just over the 2 year vesting period and the effective amc is circa 3.6%….lovely if you can get it

  3. A fee coming from the pot, still looking at how this will effect the AMC? it a separate charge. Setting up a brand new scheme in 13 months times and the way an IFA will be paid will be VERY similar. Remember commission will be a thing of the past. Could you administer/service/advise each member for £1.50 per month. What will this buy the consumer? What is the value added to the Employer and members? I would start thinking about this if you want to compete against offering’s like this one. Soon to be gone are the days when the provider tells you how much you can charge/be paid.

Leave a comment