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Balls urged to axe Asps and end confusion

The Government should scrap alternatively secured pensions to halt the confusion surrounding the product according to pensions IFA Richard Jacobs.

Jacobs, managing director of Richard Jacobs Pension & Trustee Services, has written to the Treasury Economic Secretary Ed Balls, recommending the Government abolishes Asps and saying unsecured pensions are sufficient to cover every situation for retirees at age 75.

He says assets in USp at death are currently taxed at 35 per cent but if the Government raised this to 40 per cent it would remove the risk of USP being used as an IHT avoidance tool and provide an alternative to annuities.

Jacobs believes Balls’ view that Asps, intended for people with religious objections to annuitisation, is being misused by the wealthy is inaccurate.

He says: “We do not need Asps. The rules concerning USPs are sufficient enough to cover every situation. It also avoids the ludicrous situation where pensioners are joining a religion to obtain what they see as their normal rights.”

An HMRC spokesman says: “We will not hesitate to act if the clearly prescribed rules are abused by those they were never intended for and we will be keeping a close watch on how the rules are used.”

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