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From 26 November we're restructuring how we apply product and investment charges on the Retirement Account.

As a result, many customers will see a reduction in the total amount they pay. For others, there will be no change to the overall cost they pay, but how this is applied has changed. Here’s a summary of the key changes:

  • Retirement Account product charge reduced by 15bps
  • A further 5bps reduction for those clients with a total investment amount of between £100k and £499,999
  • PruFund charge increased by 15bps, offset by the reduction in the product charge
  • No increase in the charge for the PruFolio range or any other funds

 Please read the Q&A for more details and examples what this means to clients.

What’s changing?

We’re making some changes to how we charge both new and existing customers in Retirement Account. 

We’ve restructured how we apply product and investment charges, allowing us to be more consistent, whilst offering a very competitive solution for clients who are in either the accumulation or decumulation phase of their retirement planning journey. For more information please see question below ‘Why is it changing?’.

Clients will have the same or a reduced overall charge, however they’ll see a change in how they are charged.

The following tables are not real life examples or recommendations. All charges shown are per annum and are based on the product and investment charges. Any further costs are excluded. For more information on the PruFund range of funds please see the PruFund range of funds client guide

The following table shows what these changes mean to clients who are invested in the PruFund range of funds through Retirement Account (RA).

The following table shows an example of what these changes mean to clients who are invested in the PruFolio range of funds through Retirement Account (RA). This example uses Prufolio Risk Managed Passive 1.

The following table shows an example of what these changes mean to clients who have a mix of PruFund range of funds and non-PruFund investments through Retirement Account (RA). This example is based on 50% PruFund and 50% Prufolio Risk Managed Passive 1.

Why is it changing?

We want to make our PruFund range of funds available to as many customers as we can and recently added the PruFund Planet range of funds to the M&G Wealth Platform. As a result we’ve made changes to the Retirement Account charging structure to ensure they’re consistent.

This means that no matter how you decide to manage your clients pension wealth - whether through our Retirement Account or as a pension on M&G Wealth Platform with other wrappers, the investment charge your client pays should be the same.

In addition, we want to ensure that our charges remain competitive in the market and have reduced the overall charge by between 5 and 20 bps for some clients, depending on their total investment and fund(s) selected in Retirement Account. This applies to clients at all stages of their retirement journey.

What will this mean for clients?

Clients will have the same overall charge or a reduced charge as shown in the tables above.

Does this mean the fund charge is increasing?

Our range of PruFund solutions can only be accessed via a tax wrapper. The way in which we charge clients to access Retirement Account is changing. On its own, the increase in the PruFund investment charge may suggest that the cost of our PruFund range is increasing, however, this is being offset by a reduction in the product charge for Retirement Account. 

This means the overall charge for clients accessing our PruFund range of funds will remain the same or reduce. 

When will this change?

All changes will be implemented from 26 November 2022.

Will we be writing to clients? 

We'll be notifying clients of the changes in their Annual Benefit Statements. 

Annual Benefit Statements

Annual Benefit Statements confirm the actual charges deducted in the previous 12 months – as a monetary figure. 

We'll also make clients aware that there has been a change to how they are charged and confirm the expected product and investment charge for the following 12 months – as a percentage.

Retirement Account can be a suitable solution for your clients no matter what stage in their retirement journey they’re at and here are some of the reasons why:

  • Recently reduced product charges
  • Fund size discounts
  • Save through single and regular payments
  • Make transfers from existing pensions
  • You can illustrate, apply and service your clients online as well as produce dual-branded reports
  • Access to the M&G Treasury and Investment Office (T&IO) – the engine behind Prudential’s multi asset portfolios
  • Could be a suitable solution for those clients looking to de-risk their pension at the later stages of accumulation and into decumulation
  • Gives your clients the ability to hold PruFund funds and funds from external fund managers within the same pension. And allows your clients to switch funds should they wish to in the future
  • Choice of ESG investment solutions

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