NOW: Pensions today announced that from April 2018 it will be simplifying its monthly member administration charges. This will coincide with the increase in auto enrolment minimum contributions from 2% to 5%.
For those earning over £18,000, the member administration charge is currently £1.50 per month. For those earning less than £18,000 per year, NOW: Pensions offers a discounted monthly administration charge of 30 pence.
The charge for those earning less than £18,000 was due to rise to £1.00 from October 2017 and to £1.50 from 1 October 2018 to align with the original phasing timetable.
In November 2015, the government announced a delay to the timetable with the increase in minimum contributions now taking place in April 2018 (5% of qualifying earnings) and April 2019 (8% of qualifying earnings).
To simplify the charging structure and make it easier for members to understand what they will pay for the administration of their pension, NOW: Pensions has announced that the increase to £1.00 in October 2017 will no longer take place and there will be only one pricing change to £1.50 for all members from April 2018.
Troy Clutterbuck, Interim CEO of NOW: Pensions said: “When we entered the UK market we spent a lot of time thinking about how to structure our member charges so that they are simple, transparent and above all equitable.
“By combining a low investment charge with a pounds and pence administration charge it’s clear to members how much they are paying for investment management and how much for scheme administration. By structuring the charge this way, it also means that those with larger pension pots aren’t overly subsidising those with smaller pots.
We always wanted to offer lower earners a discount on their administration fee during the initial phase of auto enrolment and we have done so since 2012, but when the phasing timetable changed, it felt right to review the timing of our planned increases.
By delaying the increase and simplifying the charges, we hope to make it easier for members to understand while still offering good value for money.”
NOW: Pensions does not charge for transfers and has recently adopted the Origo service for transfers both into and out of the scheme, thereby speeding up the transfer process.
Notes to editors
Member charges until 1 April 2018
|Earning £18,000 or less when active||£0.30||£0.30|
|Earning more than £18,000 when active||£1.50||£1.00|
|Annual investment charge||0.3% of fund||0.3% of fund|