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&#39Low commission pricing out stakeholder advice&#39

Stakeholder pensions will be misbought because low commission levels mean

that advice is priced out of the market, according to Shadow Chancellor

Mich-ael Portillo.

In his opening address at PIMS, the former chief secretary to the Treasury

told delegates that without advice, consumers will not understand the

products they buy. He warned that people could end up with “completely

worthless” pensions which may not bring them above the minimum income


Portillo said the 1 per cent charge cap mean that it is not commercially

viable for advisers to sell stakeholder.

He also suggested to Money Marketing that the Conservatives might consider

looking again at the 1 per cent cap if they win this week&#39s election.

He said his party is not prepared to make stakeholder contributions

compulsory for employers, des-cribing this as a blunt instrument that could

halt the growth of businesses.

He described the current state system as the “biggest pension rip-off” in

history, where people pay National Insurance contributions for up to 40

years to get a pension of around £72 a week. The Tories are proposing

a system where younger people allocate NI contributions to a private funded


Portillo said: “Stakeholder may have parts that will succeed but it is not

the whole answer. Commission levels are very tight. These are serious

issues and serious concerns that I know practitioners are worried about.”


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High profile appointments to Britannic Money board

Britannic Money is appointing George Wise and John Massey as non-executive directors.Wise was formerly managing director of NatWest Mortgage Services and was chairman of the Council of Mortgage Lenders in 1999.Massey was previously head of mortgages division at HSBC Bank, and is another former chairman of the CML.Britannic Money chief executive Tony Ward says: “As […]

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