Retirement and protection provider LV= has axed the drawdown fee for new customers as part of a pension charging overhaul.

The new charging structure will apply to all new pensions from this month.

The company says the changes have been instigated following a market review and research with financial advisers.

The aim is to improve competitiveness.

Policyholders will pay a wrapper fee on the first £700,000 of their pension investments but no charges will apply to sums over this level. A minimum wrapper charge of £195 is being introduced.

The LV= Flexible Transition Account will be comprised of three components allowing advisers to mix and match investments for clients:

• LV= Core offers a range of active and passive insured funds including the LV= risk-rated Smoothed Managed Funds.  Charges are 0.2% for amounts up to £700,000 and 0% for amounts about £700,000. 

• LV= Selected includes 8 DFMs and approved TIPs for bespoke investment choices. Charges are 0.25% for amounts up to £700,000 and no charge above this figure.

• LV= Extended. Offers additional DFMs and commercial property with charges of 0.3% up to £700,000 and no charges on funds above £700,000.

 Clive Bolton, managing director at LV= Savings and Retirement, said: “We have done a huge amount of work refreshing our pension range to make it more appealing to advisers and their clients.

“We have extended our online valuation service, removed the drawdown fee for new customers and these latest changes make LV= more competitive, particularly for those with pension funds between £100,000 and £500,000.”

Further changes to the pension range are planned for later this year.