Life offices are hitting investors with widely differing market value reductions on with-profits pensions, with some running at 28 per cent while others have none at all, according to research by Money Marketing Online.
The research found that Scottish Equitable tops the table for biggest MVRs, with up to 28 per cent, followed by Scottish Friendly with up to 25 per cent, Legal & General with up to 24 per cent and Scottish Widows with up to 22 per cent.
Pearl, Liverpool Victoria and Standard Life all avoided operating MVRs over the period of the survey, which looked at MVRs applied since the start of the year. The report is the first comprehensive survey of pension providers applying MVRs.
Roberts Clark director Ashley Clark says: “It is unbelievable that there is such a wide range of different rates when most of the life firms have experienced broadly similar underlying investment performance.”
Hargreaves Lansdown pensions development manager Danny Cox says: “Some of the proprietary companies are being forced to run things very close to the bone. Standard Life has so much money coming in that they can afford this. With Pearl and Liverpool Victoria, because they are old-style providers, they too have money still flowing in.”
Scottish Equitable head of public affairs Scott White says: “If you are being called to justify your strategy to a shareholder entity, you do it under a different set of disciplines than if you are in a mutual.”
See the full results at www.moneymarketing.co.uk