Type: Unsecured personal pension
Minimum investment: Lump sum £50,000
Minimum-maximum ages: 50-73
Investment choice: 41 internally managed funds and 146 externally managed funds from 24 fund management groups
Income frequency: Monthly, quarterly, yearly or half yearly
Charges: Base charge 0.5% a year, fund-based commission charge up to 2% a year depending on IFA commission taken, initial commission charge up to 0.45% a year depending on commission taken, externally managed fund charges annual 0.1-1.9% depending on fund
Commission: Menu-based comprising initial commission up to 4% plus uplift, fund-based commission up to 2% or combination of both
This unsecured personal pension provides access to 41 internally managed funds and 146 externally managed funds from 24 fund management groups.
Informed Choice director Martin Bamford regards this as a reasonable income drawdown product from a traditional product provider that is a household name. “It offers a reasonable degree of flexibility, access to a reasonable range of external funds and a reasonable charging structure. However, it’s a pretty average income drawdown product when compared to the more modern arrangements available in the market,” he says.
Considering the less appealing features of this plan Bamford says: “This product allows the investor to include protected rights and safeguarded rights, but these need to be consolidated in a separate personal pension first before being transferred to the income drawdown plan.” He adds that the range of external funds is reasonably good but not extensive.
“The commission structure is quite flexible but appears to lack the option of factory gate pricing which is a prerequisite for the modern fee charging adviser. This product is quite clearly aimed at the old model adviser who prefers to hide their commission in the annual management charge,” says Bamford. He adds that the maximum age for this product is 73, so it will not appeal to older investors or those who are considering a move into alternatively secured pension.
Discussing the competition Norwich Union could face, Bamford says: “Modern personal pensions that allow access to a wide range of investment funds and a more flexible structure. When investors are considering income drawdown they often consider a self-invested personal pension.”
Suitability to market: Average
Investment choice: Average
Adviser remuneration: Poor