What's changing?

What's changing?

Current charging structure

You currently invest in both commission-free and commission-included funds. Your new charges will be slightly different for each type of fund.

1. Your commission-included funds

For each commission-included fund you’re invested in, you currently pay an Ongoing Charges Figure (OCF). This is made up of three separate charges:

  • Fund Manager Charge – this is kept by the Fund Manager for providing and managing investments in the fund.
  • Nationwide Commission – we receive commission for the ongoing services we provide.
  • IPS Fee – Legal & General receive this charge for setting up and administering investments, and transacting on your behalf through IPS. 

2. Your commission-free funds

You are already paying an IPS Platform Charge on your commission-free funds. This is currently a variable percentage based on the total value of these funds in your IPS account.

Charging structure from 1 April 2016

1. Your commission-included funds

You will remain invested in the same funds in IPS and you will continue to pay the OCF on each commission-included fund. However, from 1 April 2016, the IPS Fee will be replaced by an IPS Platform Charge. Your current IPS Fee will be returned to you as a rebate after deduction of tax as additional units into the fund where you have your largest investment, to ensure you’re not charged twice for Legal & General’s services.

Your new annual IPS Platform Charge is a fixed percentage based on the value of your IPS holding. It will be charged separately and collected monthly from your IPS Cash account.

At the same time, here at Nationwide we are reducing the commission we receive on some funds, as part of our ongoing commitment to deliver value for money to our members. From 1 April 2016, you will pay no more than 0.50% Nationwide commission per fund.

 2. Your commission-free funds

You are already paying an IPS Platform Charge on your commission-free funds. This is currently a variable percentage based on the total value of these funds in your IPS account.

From 1 April 2016 this will change to a fixed percentage charge, which is calculated annually and paid monthly and is based on the value of your holding. This means the same IPS Platform Charge will then apply across all the funds in your IPS account.

Please note, units may be sold from your investments to pay the IPS Platform Charge. Any other separate charges you pay on these funds will continue unchanged. 

*LGIM = Legal & General Investment Management.

How the changes affect you

These changes mean you could pay higher or lower charges after 1 April 2016. There are three reasons why the charges you pay might change: 

  • The existing IPS Fee varies depending on the value of your holding while the IPS Platform Charge is a fixed percentage charge across your whole investment.
  • Any rebate you're due to receive from funds not held in an ISA are subject to tax to comply with HMRC regulations. Where relevant, this tax amount has been included in your new costs calculation. Please see the FAQs for more information on rebates.
  • Nationwide Commission will decrease on some funds so that the maximum commission is 0.50% per fund.

Please note, the rebate of the IPS Fee is treated as income under HMRC rules. Legal & General will deduct basic rate tax (currently 20%) from the rebates at source where the rebate is paid into an OEIC/Unit Trust. This means you could have an additional income tax liability if you are a higher-rate or additional-rate taxpayer. Rebates into an ISA are not subject to income tax. 

What happens next?

You don’t have to do anything as the changes will happen automatically on 1 April 2016.  However, it’s important to make sure you understand the changes and how they affect you – especially as they could create an additional income tax liability on rebates into an OEIC/Unit Trust. For an easy-to-follow explanation of how the charges have changed and why, see our video and the rest of the information in these pages.

All the information you need

The investments we offer are provided by Legal & General, who have written to you to explain the changes. Find out more about your letter from Legal & General or see below a Fund Commission Charges Table that gives a breakdown of the charges that will apply to each fund.

Find out more

Check our FAQs for more information, or get in touch.

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Speak to someone about the changes

If you’d like to know more about the new charging structure, please call Legal & General on:

0345 272 00 89*
Monday to Friday 9am to 5.30pm

Please note: Legal & General are unable to give financial advice on this number.

*Calls may be recorded.

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Discuss your options

If you’d like to speak to Nationwide about your options, please call:
0800 587 33 72 
Monday to Friday, 9am - 6pm

Alternatively, please email our Financial Planning team.