View more on these topics

Advice quandary as decision on AVCs is delayed

IFAs are slamming the Inland Revenue for stalling a decision over whether to reinstate tax-free cash for AVCs and FSAVCs, leaving them in an advice quandary.

IFAs say delaying a decision leaves them unable to give proper advice on whether clients would be better off sticking with AVCs or choosing stakeholder.

The Inland Revenue says it is yet to make a decision on whether to give AVCs and FSAVCs a tax-free lump sum on retirement despite intensive lobbying by the ABI to bring pension top-ups in line with stakeholder pensions.

Carrington Investment Consultants head of retirement planning William Sallitt says: “The Revenue hovering over whether to give AVCs tax-free cash is not helpful. It leaves us in an advice quandary. At the moment, things are weighted strongly in favour of stakeholder over AVCs. It is difficult to advise on whether to continue AVC contributions when we do not know if the Revenue will reinstate tax-free cash.”

Clerical Medical pensions strategy manager Nigel Stammers says: “It is a good idea to reinstate tax-free cash to AVCs. But it is a pity it could not be sorted out for April 5. Until they confirm it will happen, it leaves advice in no man&#39s land.”

Inland Revenue spokeswoman Janis Eate says: “No decision has been made yet. A whole range of things are being looked at on pensions because of the introduction of stakeholder. We are consulting the industry on this and we will certainly be talking to the ABI but there is no timetable to decide on it yet.”

Hunter & Co principal Robin Hunter says: “The Revenue should put the 25 per cent tax-free tax back on AVCs and FSAVCs otherwise, because of concurrency, every one will go for a stakeholder every time.”


Sun Bank offers new buy to let rates

Sun Bank is offering lower rates across its buy to let range of products available to both mainstream borrowers and complex prime borrowers.The mortgage bank is providing a choice between two, three and five year fixed rate deals as well as a variable rate. The new range includes a discounted rate of 5.99 per cent […]

Johnson&#39s view undermines PIA requirement

What excellent news from Melanie Johnson that stakeholder pensions can be bought without taking advice (Money Marketing, March 22).This means IFAs do not need to provide advice about stakeholder when discussing retirement provision with clients but instead will be within their rights to say that stakeholder pensions exist and clients should go and find out […]

Framlington opens up to UK smaller companies

Framlington has introduced the UK smaller companies fund, a unit trust that aims to provide capital growth.The fund invests in a portfolio of between 80 and 100 stocks in the UK smaller companies sector. Although technology stocks will be considered, other stocks from other sectors such as aerospace and the media will also be selected.The […]

Assured Life helps out the uninsureable

TD Waterhouse has entered the market for structured products with the introduction of its protected investment plan (Pip). This guaranteed equity bond is linked to the FTSE 100 index over a term of five-years and one month through a Guernsey-based investment company that is listed on the Irish stock exchange. Investors in the Pip will […]

Pension - thumbnail

David Cameron appoints former adviser to Tony Blair as new pensions minister

Following a cabinet reshuffle in light of last week’s general election, David Cameron has announced that Ros Altmann will be replacing Steve Webb as pensions minister. As the industry works with one of the largest reforms to the sector in almost a century, the former adviser to Tony Blair has been tasked with ensuring that the pensions revolution does not stray off track.


News and expert analysis straight to your inbox

Sign up


    Leave a comment