The Select Bond comes with a “simple, transparent charging model and lower premiums”, the company said in statement on Monday.
OMI said the new product has been designed to appeal to a wider audience and move away from the assumption that offshore bonds are “only relevant for customers with complex investment requirements or for those intending to move overseas”.
The new bond will have a one-off charge, with no initial dealing or transaction fees and will be available through the insurer’s Wealth Interactive platform, giving advisers the same access to its fund range as onshore bonds.
It will also have lower premiums to improve accessibility, said OMI.
Charges start at 0.60% on the first £25,000 and 0.25% on a fund value above £1m.
| Fund value at quarterly date | % charge each year |
| On first £25,000 | 0.60% |
| Fund value above £25,000 up to £100,000 | 0.45% |
| Fund value above £100,000 up to £500,000 | 0.40% |
| Fund value above £500,000 up to £1,000,000 | 0.35% |
| Fund value above £1,000,000 | 0.25% |
| Source: Old Mutual International |
Pension allowances
Tom Hawkins, head of UK proposition, Old Mutual Wealth, said the new product is a tax efficient way to save at a time when pension allowances are falling.
The lifetime allowance, which caps the amount of money people can save tax-free into a pension over their lifetime, has been slashed three times in the past five years, going from £1.8m in 2011 to £1m ($1.3m, €1.1m) in April 2016.
“At a time when saving for retirement is heavily on people’s minds, and the amount of tax allowance some people receive has reduced, we are seeing growing demand for alternative solutions which help investors save tax efficiently for their retirement.
“Offshore bonds can help advisers meet this demand, and simple online solutions which provide access to quality investment funds at a competitive price will be attractive,” he said.
Offshore bond closures
Last November, OMI closed two of its contractual savings plans in three key regions, including the Middle East.
The insurer may be trying to target the surging number of savers looking to transfers their pensions since the pensions freedoms came into force in April 2015.
Latest research by OMI found that UK advisers have experienced soaring demand for transfers out of defined benefit (DB) pensions, with 83% saying they had seen an increase in the last year, which is expected to continue well into next year.
