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&#39Sell stakeholder as alternative to AVCs&#39

Product providers are urging IFAs to sell stakeholder and personal pensions to occupational pension scheme members as an alternative to AVCs.

Pension experts say IFAs should use partial concurrency as a way to revive the pension top-up market by preparing to sell stakeholder or PPs as a type of additional contribution.

Providers claim far too few people top up their occupational pension. They predict a sharp rise in numbers because ofavailability of tax-free cash on retirement under stakeholder.

The Government plans to allow eight million individuals who currently pay in to occupational schemes to contribute to a stakeholder scheme simultaneously when stakeholder is launched in April 2001.

Clerical Medical pensions strategy manager Nigel Stammers says: “Reports of the death of the AVC market have been greatly exaggerated. The market will not die but the products will change. People are being allowed to use a stakeholder or personal pension as their AVC.

“This is a tremendous opportunity for IFAs. Historically speaking, people leave it until their mid-40s to start making additional contributions but the publicity surrounding stakeholder will make people think about it much earlier.”

Scottish Equitable pensions development manager Steven Cameron says: “IFAs will need to discuss this with clients who have AVCs. Any opportunity to discuss is an opportunity to review. The AVC product will be harmed but overall contributions will rise.”


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