Scottish retirement solutions provider Standard Life is to change the fee structure of its platform.
This will come in tandem with a newly-introduced ‘drawdown price lock’.
The firm said it was moving away from traditional platform fees, where rates increase as a client’s pension pot reduces.
The introduction of the lock ensures the charge customers pay on their pension savings will be set at its “lowest level for life”, it added.
The Scottish firm said the move would result in “potentially large savings for individuals throughout their retirement when compared to traditional charging models”.
Pricing updates
In addition to the pension pot lock, Standard life has lowered its Wrap platform fees.
Clients will see their charges reduced to:
- 0.35% for assets below £250,000,
- 0.25% for assets between £250,000 and £749,999.99,
- 0.15% for assets between £750,000 and £999,999.99, and
- 0.10% for assets of over £1m ($1.32m, €1.19m).
Both solutions will be available to existing and future clients starting from April 2020.
Keeping up with pension freedoms
Noel Butwell, chief executive of Standard Life Savings, said: “We take a long-term view on our pricing, ensuring fees are set at a sustainable level that aligns our interests with our adviser partners and their clients.
“This is why, as we see the impact of pension freedoms emerging through an ever-increasing proportion of clients taking income drawdown, we focused hard on ensuring our new fees addressed the challenges faced by these clients in retirement.
“Advisers who use Wrap can be confident our new fee structure means they can deliver great value for life for clients consolidating and entering drawdown.
“We also wanted to go further, which is why we introduced the drawdown price lock.
“Most platforms, including Wrap, have traditionally operated a model designed to reward savers where fees fall as the client’s pot increases.
“Unfortunately, this means as clients start to use their savings to fund their retirement, that percentage goes back up as money is withdrawn, creating an increasing drag as their pot declines.
“From April 2020, advisers can prevent this happening by ‘locking in’ the fee their clients pay when their percentage rate is at its lowest level. That way, those who invest with Wrap will benefit from lower fees all the way through retirement, and not just at outset.”
