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&#39Give IFAs immunity for pension advice&#39

The Government should offer misselling immunity to IFAs giving pension advice to people whose benefits could be means-tested, says Scottish Equitable pensions development director Stewart Ritchie.

Ritchie made his call after Department for Work and Pensions Secretary Andrew Smith indicated the forthcoming Pensions Green Paper will not touch on the new pension credit and the interaction between state benefits and private provision.

Speaking at the National Association of Pension Funds autumn conference in London last week, Smith reinforced his commitment to his predecessor Alistair Darling&#39s pension credit policy due to come in next year.

But the industry argues that only a complete overhaul of the pension system will leave the path clear for advisers to sell pensions to the Government&#39s target market of people in the £10,000-£20,000 income bracket.

Ritchie says: “If the Government is not going to look at the way the state system interacts with private pensions, then advisers are left in limbo when dealing with people on lower incomes. If advisers are going to assist the Government by selling to their target income bracket, then the Government should make a statement that advisers will not be held liable for pensions sold that fail to beat means-tested benefits.”

Smith said: “We are introducing the pension credit to ensure those who save will be rewarded for their efforts. From next year, around half of pensioner households stand to gain from the introduction of the pension credit.”

But the author of the Government&#39s pension simplification review, Watson Wyatt partner Alan Pickering, says the pension credit system should be axed within 10 years.

He says: “I see the minimum income guarantee and pension credit as a transitional system and not the finished article. They are only features of the landscape for the first decade of this century.”


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