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NU exits small group stakeholder market

Norwich Union is withdrawing group stakeholder products for companies with fewer than 20 employees to focus on bigger, more profitable corporate schemes.

It will no longer offer its Group Your Pension product range because of falling activity levels in the small to medium-sized business sector.

NU will now offer a series of individual stakeholder pensions for employers with fewer than 20 employees.

New entrants and increments to existing Group Your Pension and Group Your Pension Select policies will continue to be allowed after the change comes in on July 1.

NU will target what it views as the higher and more profitable end of the market with its Designer Pension product aimed at employers with 20 or more employees.

From June, advisers will be able to take commission as a percentage of annual premiums on Designer Pensions instead of Lautro rates.

NU says APC is simpler for employers and advisers than Lautro because commission is related to the entire cost of the scheme and does not alter as staff numbers change.

Head of pensions development Iain Oliver says: “We need to make sure business is being written profitably but in the SME sector there has been very little activity.”

Laird Financial Planning senior partner Steve Laird says: “We should be thankful it is keeping any of its stakeholder products. There is no money in it. Norwich Union is right to send the Government a strong message that if it wants a Sandler suite on 1 per cent, it will not play ball.”

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