View more on these topics

ScotEq surrender values revamped

Scottish Equitable is bowing to market pressure by revamping its pension products in a bid to make its early surrender values more attractive.

IFAs will be able to choose a policy which has high early surrender values and no paid-up penalties or a policy with high maturity values on retirement.

The new terms follow months of IFA pressure over ScotEq&#39s early surrender values. In June, Countrywide network axed ScotEq from its best-buy list for personal, group personal and executive pensions. It felt that the life office&#39s surrender and transfer values did not compare well with other providers.

ScotEq is launching the products from January 1. IFAs can choose a single-premium or regular-premium option on the policies.

The high early surrender contract offers a 95 per cent allocation rate for the first five years for regular premiums. This rises to 97.5 per cent after five years and 105 per cent after 10 years. The high maturity value contract gives 100 per cent for the first 10 years and 102.5 per cent thereafter.

The single-premium option on both contracts offers an allocation rate of up to 100 per cent depending on the size of the premium. There are no withdrawal or paid-up penalties on the high early surrender value contract. Annual management charge is 1 per cent and there is a monthly charge of up to £3.45. Minimum premium is £20 a month or £200 a year.

ScotEq gives an extra 0.5 per cent allocation for every 10 per cent of Lautro rates initial commission. It will boost allocation rates by 2 per cent for full 2.5 per cent renewal commission.

Operations director Graham Dumble says: "It is important to be flexible in today&#39s market."


M & G Peps smooth transition to ISAs

M&G is creating a range of Peps it claims will pave the way for the switch to Individual Savings Accounts next year. The new Fundamentals range incorporates three existing M&G Pep funds – the corporate-bond Pep fund, the blue-chip Pep fund and the managed income Pep fund. M&G will also be launching an index-tracker Pep […]

Life sales could be hit in long-term CGT shift

Sales of life insurance policies could be crippled following the Budget&#39s revamp of the capital gains tax regime which now favours unit trusts. The Chancellor is making a major reform of the capital gains system in a bid to change the tendency toward short-term investments by rewarding long-term investments. The change will hit many life […]

How QE is distorting the gilt market

By Mike Riddell The moves in gilts in August were truly exceptional. Volatility in the gilt market (based off 10-year gilt futures) has soared to close to the highest levels seen this millennium, on a par with the eurozone debt crisis of 2011/12 and behind only the global financial crisis of 2008/09. The first distortion […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment