M&G hopes to cash in with the simple pension
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.M&G is switching its focus towards pensions, which it believes will be the main growth area for financial services companies in the next five years.
It has launched a new range of pensions designed to be more transparent in their charging structure than those of its rivals.
Since 1 January all pension providers have been forced to reveal the proportion of investors' premiums that are swallowed by charges. This has led providers to trim costs and simplify the structure.
Peter Emms, M&G's sales and marketing director, said: "What you see is what you get.'' The whole amount of their contributions will be credited to customers' accounts and then charges deducted. Investors will be able to see at a glance what they have paid in and what has gone out in charges.
"There are no capital units and no illusory or projected bonuses that can disappear,'' Mr Emms said.
There is a penalty for transfers within the first two year, but after that period the full fund value can be taken elsewhere. Investors can increase, decrease or suspend contributions without penalty as long as the fund has built up to a minimum of £500.
M&G has about1 per cent of the pensions market One of Britain's largest pension providers, Prudential, has already altered its pensions to make them more flexible and easier for investors to understand.
Other pension providers have responded to the new requirement to show all costs and commission payments by shaving their margins, but not necessarily making the pension any simpler.
Investors' initial enthusiasm for personal pensions has waned as the publicity over the mis-selling of schemes has gathered pace. Thousands of people who would have been better off staying in a company scheme were persuaded to take out a personal pension.
Insurance companies have been ordered by the Securities and Investments Board to review their pensions, and this could lead to compensation payments of some £2bn.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments