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PepDirect removes up front commission fees for pensions

PepDirect parent Torquil Clark is launching a radical flat-fee pensions dealing service that waives up-front commission fees.


PepDirect will deliver the service through its TQ Direct Choice arm.


For a flat fee of £50 plus VAT it will set up a pension with one of a panel of vetted providers without charging any initial commission.


The providers at present are CGU, Standard Life, Scottish Widows and Scottish Life.


Torquil Clark pensions development manager Tom McPhail says: &#34The high up-front charges associated with taking out personal pensions have adversely affected the eventual size of the pension pot and early transfer values.


&#34Because some companies charge up to 60 per cent of the first year&#39s premiums the product provider is left with a debt attached to the plan which must recouped over the life of the policy.&#34


TQ Direct Choice believe that it could turn the average 25-year plan with £200 monthly premiums assuming 9 per cent growth into £193,000.


The scheme will accept other providers if they meet certain criteria set by TQ Direct Choice. This will include financial strength, investment performance, charging structure and Year 2000 compliance.

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