Old Mutual Wealth is simplifying its charging structure ahead of UK government changes to the retirement market that come into effect in April next year.
The wealth manager will remove the annual pension drawdown fee, which is currently set at £58.20 (€73.09) per year, and will scrap the minimum charge of £8.33 per month that applies to those with investments of less than £20,000.
These changes will come into effect at the beginning of January.
The new rules in the UK give investors greater flexibility over how to access their retirement savings and are likely to result in more investors taking up drawdown agreements instead of purchasing an annuity.
Old Mutual Wealth says its decision will affect about 8,000 of its customers.
Tom Hawkins, head of financial solutions at Old Mutual Wealth, says: “Additional layers of charges, such as those for switching, drawdown or exit charges are hazardous for customers as they can never fully predict future behaviour and therefore how much they will pay in the longer term.”
Hawkins says such drawdown charges should become obsolete as a result of the budget and that the new rules will remove much of the administration associated with income drawdown.
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