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Annuity reform campaign disappointed

The Chancellor has dashed industry hopes of a review into the annuity market, over Treasury fears it would cost hundreds of millions to implement.

In the Budget statement the Treasury says it has ruled out such a move after costing the alternatives proposed by interested parties including Dr Oonagh McDonald&#39s Retirement Income Reform Campaign.

The Treasury&#39s inaction has come under fire from pro-reformists, who have questioned whether the Chancellor Gordon Brown has fully understood the arguments put forward and have vowed to fight on.

Brown had been widely tipped to announce a wide ranging review of post retirement income with many industry experts expecting the introduction of an interim measure increasing the age of compulsory annuity purchase to 80 from 75 before more fundamental reform.

Instead the Treasury plans to rely on the industry to develop products to deal with the annuity problem and highlights the need to encourage savers to take the open market option when purchasing an annuity.

Retirement Income Reform Campaign director Dr Oonagh McDonald says: “The suggested reforms will not all cost hundreds of millions. The Government has fundamentally not understood the proposals in the Choices paper.”

Wentworth Rose managing director Philip Rose says: “This clearly shows the Government has not heard the message. It is a shame that there has been some reporting that this budget would abolish annuities, this means some people could have put off buying an annuity. With the unprecedented step of paying-off of £34bn of debt, this is likely to lead to gilt repurchase, and people are likely to have to buy at lower rates than before.”


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Tax on benefit transfers clarified

The Inland Revenue has clarified the tax position for individuals transferring the benefits of a joint life insurance policy. Previously, if two unmarried individuals transferred the benefits of a joint policy between them, the transfer was taxable. With the clarification, the person transferring the ownership is liable for tax but only if they get an […]

Taxing time over Friends Provident

Friends Provident is at it again! In June 1999, I arranged a with-profits investment bond with Friends Provident and in October our client received an invitation to an inheritance tax seminar from the society&#39s direct sales office in Fareham. |I wrote and protested to Friends Provident and pointed out that in this case it had […]

Sagitta Asset Management – Sagitta Healthcare Fund

Thursday, 8th March 2001.Type: Ucits.Aim: Growth by investing in healthcare companies.Minimum investment: $50,000.Place of registration: Dublin.Isa link: No.Charges: Annual 1.25 per cent.Commission: None.Tel: 020 7543 1514. 

Embrace simplicity!

By Fiona Holmes, proposition communications manager When I first took out critical illness cover, I was overwhelmed. It wasn’t just the form filling, it was finding out about the sheer number of illnesses I was covered for. Did it give me peace of mind that I was covered for neuromyelitis optica or systematic lupus erythematosus? […]


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