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&#39Double jeopardy&#39 warning on Esops

IFAs are warning that the Chancellor’ proposed new all-employee share ownership scheme could jeopardise investors and compete head-to-head with AVCs.

Industry experts fear that people who take up the schemes to enhance their pension provision could face the risk of double ruin if their companies run into trouble.

The scheme is set to allow employees to use part of their pre-tax salary to buy shares in their employer’ company before paying income tax or National Insurance contributions. Tax is only paid when the shares are sold and none is paid on any gains.

Encouraging people to buy shares this way could compete directly against free-stan-ding AVCs which are also paid out of pre-tax income.

Scottish Equitable pensions development director Stewart Ritchie says: “It is double jeopardy. Many people have limited income they can dedicate to savings. AVC assets are not invested in the employee’ company and, if their company is in financial difficulties, AVCs will not be in jeopardy but these shares will.”

Millfield Partnership partner Hugh Jory says: “There has been lots of bad publicity about the cost of AVCs.

“But with these shares there is a risk element which is the same as with a single-company Pep.”

Scottish Amicable IT & development director Gavin Stewart says: “It is not a good thing to have your salary and savings in one basket.”


Shepherds and Savignon promotes Teps in Gibraltar

Shepherds and Savignon Financial Services is holding a seminar in Gibraltar next month to promote its Traded Endowment Policies.The Tep provider says it is targeting the expatriate market because Teps are a safe investment haven for UK nationals living abroad.The seminar will also provide participants with an opportunity to try out Shepherds&#39 quotation software.

Mortgage regulation faces APR shake-up

Self-regulation of the mortgage market is to be strengthened following Gordon Brown&#39s decision to force a uniform system of mortgage payment quotations.Lenders say a uniform system of providing information will give borrowers more accurate information about repayments and prevent allegations of misselling.They argue that the pol icy, to be enforced from April 2000, will strengthen […]

Midshires questions lack of help for savers in Budget

Birmingham Midshires chief executive Ian Kerr has hit at out at the Budget for failing to help savers.He says: &#34Savers are the big losers in the Budget, which puts more money in their pockets, but gives them no incentive to save for a rainy day.The society is would have liked to have seen the new […]

Vanbrugh Financial Communications appoints director

Vanbrugh Financial Communications has appointed former Pearson legal director Paul Vickers as non-executive director.Vanbrugh managing director Sophie Hull says: &#34Paul&#39s telecommunications and media business experience as well as independent and objective counsel will be much valued as we continue to grow the business.&#34


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