Because they will be pan-European, PEPPs are likely to be portable from country to country and will deliver standardised features across the board, regardless of the location in which they were sold. It is also thought they will include flexibility for savers, allowing them to switch providers with relative ease.
Bulgaria currently holds the European Council presidency and the country’s minister for finance, Vladislav Goranov, recently told press that PEPPs will “promote competition amongst pension providers, enabling them to sell pension products outside their national markets and giving savers more choice over how and where to place their savings.”
Draft regulation documents suggest that after a minimum period of five years from the end of the contract savers would be able to switch providers (or five years from the most recent provider switch). Some providers may even allow such changes more frequently and fees for provider changes would be capped.
However, in order to become an expat pensions reality, the regulations must first be approved by European Parliament.
Watch this space.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
The UK has had an unprecedented period of low interest rates; 2009 saw the base rate drop to 0.5 and then last August down to 0.25. That’s eight years of extremely low interest rates. Whilst this has been great for borrowers and helps to keep the business economy afloat, it has been disastrous for those people in or approaching retirement. Annuity rates have been terrible for pension income returns and the bank rates for the people who have savings have been providing very poor returns.
Following on from last week’s