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NU caps lifetime penalty

Norwich Union is capping the early redemption charges on its lifetime mortgage, bowing to pressure from IFAs and mortgage brokers.

The product was criticised last year by IFAs who said the uncapped mark-to-market ERCs were unacceptable because they are linked to long-term gilt yields so if interest rates go down, the ERC could exceed the value of the loan.

NU has put a cap of 25 per cent on the ERC and is also reducing the interest rate on the product from 7.35 per cent to 6.99 per cent for IFA-introduced business, and from 7.49 per cent to 7.29 per cent for direct business.

Marketing manager for equity release Simon McGuinness says: “We know the ERCs have been an issue for IFAs, and hopefully they will see this as a positive move. The cap will provide another level of guarantee to our customers but in reality it is unlikely that they will ever hit the cap.”

Charcol senior technical manager Ray Boulger says: “There is now no reason not to recommend the NU product on the basis that it now has a competitive interest rate. But I would have expected a much lower cap – the OFT put a retrospective cap of 9 per cent on NatWest&#39s mark-to-market ERCs in 1999.”


Commission culture exacerbated endowment crisis

Labour MP John McFall has blamed the financial services industry&#39s commission culture for exacerbating the endowment crisis and has called for a “more positive engagement” from the industry in tackling the problems created by mortgage endowment shortfalls. The Treasury select committee chairman has made the call following the publication of the committee&#39s report on restoring […]

Bedford to build up quality advisers for Worldwide

Former Sesame network sales director Andrew Bedford has been appointed non-executive chairman of IFA Worldwide Financial Planning. Bedford, who is currently chairman of 3D Communications, will cover media relations, brand development, provider relations and strategic development at WWFP. He will also be responsible for introducing high-quality advisers to the business over the next two years, […]

NU says NAO conclusions are no surprise

Providers say they are not surprised by the outcome of the National Audit Office&#39s review of the Government&#39s £1.4m lifetime contribution limit cap published today. Norwich Union says it expected the NAO to largely agree with the Revenue&#39s estimates of who would be affected immediately and in the future by the implementation of pensions simplification […]

Royal Skandia boosts fund range

Royal Skandia has added eight funds in four currencies to its self-select range.The funds &#45 from companies such as First State, Fidelity and JPMorgan Fleming – include the US equity fund managed by T.Rowe Price.Royal Skandia marketing manager Nic Burton says, “We are delighted to make this fund available through Royal Skandia. Larry Puglia and […]

Is this the endgame for the current mergers & acquisitions boom?

Last year, worldwide mergers and acquisitions (M&A) rose to an unprecedented $4.7tn, according to Thomson Reuters, a 41 per cent increase over 2014. Anthony Forcione, senior equity analyst at Loomis Sayles, an affiliate of Natixis Global Asset Management, looks at what’s been driving this particular wave of mergers. Click here to view full article: Loomis-Sayles


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