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Abbey calls for Revenue rethink on s32 clusters

Brokers are finding themselves increasingly squeezed by len-ders on buy-to-let mortgages, prompting questions on whe-ther concerns over the sector are rising.

Chelsea Mortgage Management sales manager Simon Bucknell says most lenders are taking a “play it safe” approach to loans when, in the current economic climate, it should be a good time for lenders to be innovative with financially sound clients.

Bucknell says he and other brokers are struggling to get normally approved mortgages agreed due to sudden inflex-ible criteria and unusually high rental yields.

Bucknell says The Mortgage Works labelled a can-didate as falling “outside criteria” because she was going on maternity leave.

Bristol & West spokeswoman Carla Lavender says criteria in the market are being tweaked to respond to market conditions but she argues that this is responsible rather than restrictive.

But Bucknell says: “For residential mortgages, most len-ders bend over backwards but not for BTL.”

Paragon Group director of mortgages John Heron says: “There is no question now that the housing market is slowing, albeit that current information indicates we are heading more for a soft landing than a crash. We are careful therefore to assess property value and particularly the rental flow on an individual property but criteria in this respect has not tightened in recent months, it is simply the case that a more cautious outlook is appropriate.”

Abbey is lobbying the Inland Revenue to change the reporting and registration requirements of clustered section 32 plans to prevent admin chaos in April 2006.

Under current rules, from A-Day, Abbey will have to send 500,000 registration forms to the Revenue for its 500 clustered section 32 plan customers and a further 500,000 annual reports to its clients. Similarly, notification forms will have to be sent to the Revenue each time a cluster is vested.

With clustered section 32s, each cluster is counted as an individual pension scheme, which is beneficial for preserving tax-free cash rights but at the cost of a major admin headache.

Abbey’s clustered section 32s each have 1,000 clusters so they effectively count as 1,000 individual schemes, each with their own registration and reporting requirements. This will cost Abbey tens, if not hundreds, of thousands of pounds.

Head of pensions Mike Brown says the group is lobbying the Revenue to be able to treat the clustered section 32 as a single scheme for reporting purposes while retaining their existing multi-scheme status for tax-free cash purposes.


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I am 57 and have been provided with a pension share valued at 400,000 of my former husband’s small self-administered scheme. I have been told that I must move my money out of his scheme. Can you suggest where as I have no pension of my own?


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