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Advice dilemma as ministers differ

The pension industry is pressing the Treasury and DSS to clarify if advice is needed for stakeholder, with senior ministers adopting apparently contradictory positions.

IFAs and providers say the Government must clarify the situation this week as stakeholder launches or risk leaving consumers in the dark.

Social Security Secretary Alistair Darling is on the record in a series of interviews over the last two years saying people buying a pension should seek advice.

But in a letter to Tory MP John Randall obtained by Money Marketing, Treasury economic secretary Melanie Johnson says that consumers should be able to get a good deal on stakeholder pensions without advice.

The letter says: “Whilst financial advice can be valuable, it is not a necessary condition for all savings and investments that are suited to people&#39s individual needs and circumstances.

“For example, Catmarked products and stakeholder pensions are products whose standards mean investors should be able to get a good deal without needing to pay for advice.”

In a letter to Money Marketing, Scottish Equitable pensions development director Stewart Ritchie advises John-son to check with what he believes is Darling&#39s proadvice position. Darling is Ritchie&#39s local MP in Edinburgh.

IFAs have also written to the Treasury asking for clarification of the situation.

A Treasury spokesman says: “the point made by the economic secretary is not that advice is never necessary but that it is not always need for all savings and investments.”

A DSS spokesman says: “We have always been clear on our position and it is the same as the Treasury&#39s, which is it that is up to the individual whether they feel they need advice or not.”

Annuity Bureau director Ronnie Lymburn says: “It shows the Government pretends to consult and then says things that are diametrically opposed.”


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