Personal PensionFeb 27 2015

Simple funds, clear information: Scot Wids prepares

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Simple funds, clear information: Scot Wids prepares

Scottish Widows has been investing millions into getting ready for the pension changes, chief executive Toby Strauss has confirmed.

Speaking to Financial Adviser as the Lloyds Banking Group unveiled its annual results, Mr Strauss, who heads the life and pensions division, said Scottish Widows was bringing out simplified products and focusing on certain aspects of the annuity market.

He said: “In terms of pension products, we are not going to have term or variable annuities on day one after the changes come in but we will see how the market evolves.

“However we are going to enter the bulk annuity market in 2015 and see this as a key area of growth.

“We have been thinking about how we can bring in products that fit the changes, such as a simple, low-cost pension, on a non-advised basis, adding simple funds to the product.”

The simple product, which will suit people with very small pension pots of £10,000, will also allow people to invest for their future but have the flexibility to take their money out, Mr Strauss explained.

He said: “The big thing for us is on engagement, and we are investing in bringing people on board who can talk clients through their options.”

The new website, which Scottish Widows unveiled last year, called Retirement Explained, is also being updated to reflect the Pension Wise information and the second line of defence detail, which was announced today (27 February) by the FCA.

Mr Strauss added: “We are very focused on the changes. I cannot give specific numbers as to how much we have spent [on systems and people and product innovation] but we are investing millions in this.”

In LBG’s annual results, the company revealed that underlying profits in the insurance division was down 15 per cent to £922m, primarily as a result on lower commission paid on corporate pensions and the cap on pension charges.

However there was a 10 per cent rise in corporate FUM, which saw a £3bn increase in unit-linked pension funds under management, taking the total to £79bn.