• Pilot offers a group of customers with NPL pension plans the chance to move their policy to a unit linked fund with no MVR deducted
• Offer in exchange for giving up future guaranteed annual returns
• Scheme launched to give customers ‘pensions freedoms’ choice from 55

Phoenix Life is announcing a pilot scheme offering a group of NPL pension policyholders the opportunity to move out of the with-profits fund they are currently invested in to a unit linked fund, MVR free, in exchange for giving up any future guaranteed annual returns on their policy.

When Phoenix customers first took out their pension, it was common to stop work and retire at age 60 or 65. However, the introduction of pensions freedoms have provided customers with more options from age 55.

The customers in this pilot currently have an MVR levied on their policy which means if they withdraw funds before their selected retirement date (typically age 60 or 65), the value of their fund will be reduced to reflect the actual value of the units they have invested.

This pilot scheme is being offered to 1,000 customers in the Phoenix NPL fund, and gives customers a choice – to remain with the with-profits fund and continue to benefit from the guaranteed annual returns or switch the money to a unit linked fund MVR-free which offers greater flexibility should they wish to access funds before their selected retirement date.

On moving to the unit linked fund, customers will lose the future guaranteed annual returns currently applying to their policy (although they will keep returns earned to date) and will be able to take advantage of early access to pensions freedoms flexibilities, remain invested in their chosen fund or transfer it to another provider with no penalties applied.

A Phoenix spokesperson commented: “We are aware that an MVR may influence customers considering using pensions freedoms as part of their retirement planning. This pilot scheme is about offering customers a choice. We believe the option to switch now will be attractive to customers who are considering accessing their pension savings early.

“We have made the offer terms very clear in the tailored letter sent to customers and we have strongly recommended they consider seeking independent financial advice before taking any action. Should the pilot prove popular then we will consider rolling this out to other customers”

Phoenix Life is mailing all customers in the pilot, outlining in plain English what the offer entails and who might be interested in it. Comprehensive information is available on the Phoenix Life website and a dedicated phone line is available for customers to contact the customer centre if they want further information to understand the pilot scheme. Customers have ten weeks to consider the offer and will also get the chance to change their mind after accepting. If customers take no action, no changes will be made to their policy and it will remain in the with-profits fund.

For those customers who intend on keeping their policy until their selected retirement date, this offer is unlikely to be suitable and we are strongly recommending all customers offered the pilot consider obtaining financial advice before making any decisions.

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Enquiries

Shellie Wells
Head of Corporate Communications
Phoenix Group
020 3735 0922 / 07872 414 137
shellie.wells@thephoenixgroup.com

Louise Hetherington
Lansons
020 7294 3678
louiseh@lansons.com

Notes to editors

The pilot is being offered to 1,000 customers within the NPL fund so is not available to all customers. Those included in the pilot will receive a letter informing them of the details.

The Phoenix Group is the UK’s largest specialist consolidator of closed life and pension funds with over 6.1 million policyholders and £75 billion of assets held by the Group’s life companies, including the acquired AXA Wealth, SunLife and Abbey Life businesses.