Aegon claims to have simplified the way it charges clients of its One Retirement pensions offering and Aegon Retirement Choices investment platform by introducing a charge cap.
In its One Retirement pensions offering the insurer has removed product charges on all assets of £250,000 or more and attached a single charge of 0.3 per cent to all assets below this, creating an effective charge cap of £750.
Previously, Aegon charged 0.4 per cent for assets up to £99,999, 0.35 per cent for the next £150,000, 0.25 per cent for the next £250,000, 0.2 per cent for assets between £500,000 and a £1m, and 0.1 per cent for anything above that.
It has also reduced the minimum investment amounts to £200 for regular monthly premiums and £2,000 for single and transfer premiums.
On its ARC investment platform, Aegon has scrapped its platform fee on assets of £250,000 and above, effectively capping the total annual platform charge at £1,215.
However, the insurer will still charge 0.6 per cent for the first £29,999, 0.55 per cent for £30,000 to £49,999, 0.5 per cent for assets between £50,000 and £99,999, and 0.45 per cent for assets from £100,000 to £249,999.
Aegon said there will be no changes in other fees across both One Retirement and ARC, meaning there is still no charge to set up a plan or switch funds. The current annual drawdown fee of £75 remains in place and there are no further changes to investment charges.
One Retirement funds will be reduced to a focused range for new business from 30 April 2014, and existing customers will be given the option to switch to the new selection or stay where they are.
Mark Polson, principal at the Lang Cat consultancy, said: “Aegon has finally done what we’ve been calling for in the advised platform market for ages and introduced a price cap. The exact amount doesn’t matter so much; what does matter is that a provider has finally said ‘enough is enough’ in terms of charges and been grown up enough to set a top limit.
“This makes One Retirement and ARC much more attractive for larger portfolios, of course, with One Retirement looking quite sharp at the bottom end. ARC remains fully priced, shall we say, up to larger portfolio sizes, but thereafter it really takes off.
“We think Aegon has done a brave thing here commercially, and we expect to see other providers follow suit over time, as they have in the direct market.”
