Skandia has designed a group personal pension (GPP) as a competitor to stakeholder schemes.
The GPP is part of the Multipension range, which deliberately avoids the one per cent capped charge of stakeholder schemes and the restrictions this can place on fund links.
Instead, this GPP provides access to 222 funds from 28 fund managers, including Aberdeen, Credit Suisse, Deutsche, Fidelity and Schroder, Skandia plans to boost the investment choice even further by the end of the year with 78 more funds and six more fund managers
The one per cent stakeholder charge has been an influential factor on the group personal pension market, as many group personal pensions now mirror this charging structure. The Skandia pension goes against this trend to provide an extensive range of fund links, including a with-profits fund.
Although less experienced employees could feel they are drowning in a sea of fund choices, high earners in small to medium sized companies with some experience of investing could find it more useful than a stakeholder scheme.
Under a stakeholder scheme where lower costs can mean less choice, investors who are not happy with the performance of their funds may have to change to another stakeholder providers. Investors who have a Skandia GPP would not need to take such drastic action as they could simply switch to other funds from another fund manager.