Royal & Sun Alliance personal pension policyholders could see their annual charges slashed by half.
The company is reducing the charges across its range of new and existing personal pensions as it gears up for stakeholder in April.
Annual management charges on the average policy will fall from between 1 per cent to 2 per cent to 0.7 and 1 per cent from April.
The charge will be reduced by a further 0.1 per cent each time the fund reaches £25,000, £50,000 and £100,000, reducing the AMC to as little as 0.4 per cent for bigger funds.
The allocation rate for policies will be increased from 95 to 100 per cent and the monthly policy fee of up to £3.95 will be abolished on policies where premiums are currently being paid.
R&SA says the move shows its commitment to personal pensions in the stakeholder world. It says because of the provision for the cost of advice and sophisticated fund options, personal pensions will continue to play a role post-stakeholder.
Director of IFA corporate business says: “Over a typical lifetime, the savings in charges could add thousands of pounds to a customer's pension fund. We remain convinced that the personal pension has a bright future, particularly in the IFA market, alongside stakeholder pensions.”
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