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Boom in employee benefits predicted

Scottish Equitable predicts employee benefits will be a key growth area for IFAs following changes brought by the introduction of stakeholder.

The life office bases its expectations on tax changes being introduced for stakeholder which will reduce the level of payments that can be made towards life insurance within a group personal pension.

The maximum payment that can be made for life cover within a GPP is currently 5 per cent of net relevant earnings but under the new legislation will fall to a maximum of 10 per cent of pension contributions.

ScotEq suggests employers could look to offer their staff a more comprehensive range of benefits including income protection, critical illness and life cover. Sickness and absence management programmes can be introduced to help staff get back to work.

The life office says menu-based benefit options can be tailored for even small- to medium-sized businesses.

Employee benefits development manager Sue Sneddon says: “Stakeholder presents a good opportunity for IFAs to talk to corporate clients about the wider benefits they can offer staff at the same time as they review pension arrangements.

“The taxation changes may prompt many employers to rethink the risk benefits and set up a stand-alone employee benefits package rather than deal with the complications of different rules applying to different employees.”



The one sure thing about the future stakeholder scene is that it will be markedly different from today. At the moment, the major players are positioning themselves with product offerings designed to secure the much-needed market share to make a profit. Stakeholder has already had an effect on two IFA life offices. It has driven […]

Fourth scenario for stakeholder

I was very interested to read Adrian Boulding&#39s article on scenario planning in MM&#39s Surviving Stakeholder series.He gave three scenarios – stakeholder succeeds, compulsion and stakeholder flops.There is a fourth scenario which might be termed “stakeholder succeeds as a catalyst”.Under this scenario, stakeholder might be modestly successful in its own right but its real importance […]

Massow buys Rainbow in gay merger

Massow Financial Services is to buy competitor Rainbow Finance, creating the biggest financial services firm catering to the gay community.The new firm will havea total of 17 registered individuals and will offer its own line of products designed for gay people, including a pink stakeholder which will offer benefits to same-sex partners. The firm is […]

Heart of the matter

IFAs are ideally placed to make the most of the growing market for employee benefits and should alert corporate clients to the cost savings that can be brought about through a comprehensive scheme.Traditionally, many employers, particularly smaller businesses, may have been reluctant to introduce a fu lly-fledged scheme for their staff. Deterred by the assumption […]

How QE is distorting the gilt market

By Mike Riddell The moves in gilts in August were truly exceptional. Volatility in the gilt market (based off 10-year gilt futures) has soared to close to the highest levels seen this millennium, on a par with the eurozone debt crisis of 2011/12 and behind only the global financial crisis of 2008/09. The first distortion […]


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