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Pension charge cap to cost Aegon up to £25m a year

Aegon estimates the pensions charge cap will cost the business up to £25m a year.

The Department for Work and Pensions confirmed in March that any scheme with a charge of over 0.75 per cent would not be eligible for auto-enrolment from April 2015.

Aegon announced a month later it would apply the charge cap on all business written from 31 August.

In its quarterly results last week, Aegon estimates the cap will cost between £20 and £25m annually.

It adds following the FCA’s announcement of a review into closed book business, it will be moving to “upgrade its traditional policies onto its platform”.

Aegon says assets on the platform have reached £1.6bn, up from £200m in Q1 2013. 

Earnings from the life business were flat year-on-year at £18m while earnings from pensions doubled from £2m to £4m.

Aegon chief executive Adrian Grace says it is important for advisers to see its recently launched D2C platform Retiready “as a solution for them as well.”  

He says: “What they have got is a lot of low-value clients and don’t know what to do with them, suddenly they can give those clients to Retiready and in time, when the client needs advice, we can refer them back to the intermediary.”

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