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75 per cent opt to remain contracted out after L&G mailing

Latest results from Legal & General’s mailing to contracted out customers show that 75 per cent have specifically chosen to remain contracted out of the State Second Pension.

Early indications announced in December were that 83 per cent had opted to remain contracted out.

The firm asked customers to return a form to it to indicate their decision either way.

L&G says its message to customers is the same as last year – that people wanting to maximise the pension they can expect to get at state pension age are more likely to achieve this by contracting back into S2P. But it says contracting out can give customers more flexibility.

Legal & General wealth policy director Adrian Boulding says on the basis that those who reply early usually have the strongest views, the results vindicate its stance on the importance of giving customers a choice regarding their contracting out decision.

The news comes as several firms, such as Norwich Union, continue their controversial policy of mass contracting-in of customers that have failed to respond to correspondence presenting them with the options. Norwich Union has defended its policy, arguing it has led the way in communication with customers on this issue.

Boulding says: “We have placed a great deal of emphasis on communication with this year’s mailing to customers which, as well as a personal letter, has included a full Question and Answer leaflet and a link to a podcast (www.legalandgeneral.com/podcast) to help pension customers make their contracting out decision for the 2006/2007 tax year.”

He says: “Bearing in mind we are still only in February, we are delighted with the high customer response rate of 18% and we have now started a follow up mailing to remind our remaining contracted out customers that they need to make their contracted out decision for the 2006/2007 tax year before 5 April 2007.”

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