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Pru ensures high transfer value on ScotAm pension

Scottish Amicable is rolling out its first pension product to be backed by the Prudential following last year&#39s £2.8bn acquisition.

ScotAm is launching a regular contribution pension with high, penalty-free early transfer values. It is the first time that ScotAm has offered a policy which has high transfer values. It says the move is possible because of the financial backing of the Pru.

Contracts with high, penalty-free transfer values risk making a financial loss if too many investors move early in the policy&#39s lifetime.

The new policy also allows investors to stop and start contributions without penalty.

ScotAm has ditched its old contract which offered high maturity values. But it says it will monitor the market to see if investors and IFAs want this type of contract. It could bring the contract back alongside the new policy if there is a market for it.

Allocation rates start at 95 per cent, rising to 105 per cent after the 10th year. ScotAm is also offering a loyalty bonus which will reduce the annual fund management charge of 1 per cent to 0.5 per cent.

Paid-up policies will also get the loyalty bonus. There is an annual charge of £35 for personal pensions and £45 for executive personal pensions.

ScotAm is offering a waiver of contribution plan with the pension policy.

As a special offer, the first 12 months of its standard and comprehensive waiver pol- icies are free. The waiver ben-efit runs for three, six or 12 months.

Director of pensions development John Glendinning says: "This is our first product since the Pru bought us. We are able to offer high transfer values because of the strength which the Pru has. The policy reflects the market and political trend towards fair pension policies."

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