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Advisers anxious on Asps

‘The knowledge that your pension fund will no longer die with you is a great incentive for people to fund a pension’

Advisers say forced annuitisation is a major turn-off for pension clients and not having to buy an annuity is one of the main drivers behind the popularity of Asps.

Skandia invited feedback from IFAs on Asps amid growing concerns that the Government could be set to announce spoiler charges on Asps or scrap them entirely in the pre-Budget report on December 6.

Comments sent to the company express widespread anger over the Government’s treatment of the product.

Barry O’Loughlin, of Hastings O’Loughlin, says: “The knowledge that it is no longer the case that your pension fund will die with you and your spouse is a great incentive for people to fund their pension to provide for themselves and their families.

“If Asp is withdrawn, it will ensure that, with very good reason, even fewer people will ever again trust anything the Government says on pensions. To backtrack now would probably be the final nail in the individual pension savings coffin.”

Keith Mitchell, from Griffins Financial Solutions, says: “I have long been damned if I can see why I or my clients should have to hand over our funds to an annuity lottery.”

Tobin Roberts from Oakland Financial Management says: “Let us hope that the Government do not take the retrograde step of insisting on annuity purchase at 75. The only effect of this would make pensions and pension planning less attractive.”

Andy McQueen, from Argyll Financial Services, says: “The forced purchase of annuities has, in my experience over the last 20 years, been the single most important barrier to gaining commitment from clients to invest into pensions, which the Government wishes to encourage.”

Judith Conde, from Eagle Financial Services, says: “Take Asps away and this will destroy all the good work of pension simplification.”

Skandia Life head of marketing Billy Mackay says: “Many people have said that Asp is a niche product and indeed the indications are that so far there are only a few clients who have taken it out.

“But the concept of freedom of choice is far from niche and applies universally to anyone and everyone who is considering saving for retirement, not just those nearing their 75th birthday.”

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