Bank savings cheaper than personal pensions - Consumentenbond
NETHERLANDS - Tax-friendly ‘bank savings products' recently launched as a pension are considerably cheaper than third pillar pensions sold by insurers, the consumers' body Consumentenbond has claimed.
Returns on bank savings products are higher because they incur much less costs, according to the organisation, which looked into schemes offered by six banks and insurers.
The Consumentenbond found annuity insurers, as they tend to be known in the Netherlands, or personal pensions providers, charge up to 34% in costs, while the option of investing through bank saving products incur costs of between 1% at Delta Lloyd) and 17% at Fortis and ABN Amro costs.
However, the exact costs difference depends on the duration and the returns of the scheme, the body made clear.
The Consumentenbond did not specifically look for the cause of the costs difference, a spokeswoman said. "However, banks have been traditionally cheaper, because of their different costs structure," she pointed out.
According to the Consumentenbond, an increasing number of providers are offering bank saving products, and insurers have introduced cheaper annuity insurances as a consequence.
But in response, Hennie Zoontjes, spokesman for the Dutch Association of Insurers (VvV), commented: "The Consumentenbond did not do the consumers a favour, because it compared non-comparable products. The bank savings product is a plain concept, while a life insurance contains more elements such as income guarantee and coverage against the risk of death and incapacity," he argued.
"Moreover, it isn't clear whether the Consumentenbond has taken the costs of advice of bank saving into account," Zoontjes added.
Tax-friendly bank saving were introduced on January 1, the aim being to offer consumers more options when looking to make additional pensions savings, as well as driving down costs through increased competition between banks and insurers.
The legislation was initiated by MPs Staf Depla of labour party PvdA and Stef Blok of liberal party VVD.
The Consumentenbond looked at the bank saving products of ABN Amro, Allianz, Delta Lloyd, Fortis, Rabobank and SNS Bank in its study.
According to the organisation, Rabobank and Generali declined to participate in the survey while Aegon and Erasmus have yet to complete development of their bank savings schemes, it said.
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