View more on these topics

CA says 2% cap would turn public away from pensions

Doubling the stakeholder charge cap to 2 per cent would exacerbate the pension crisis as people would turn to savings accounts rather than stakeholder pensions, according to research from the Consumers&#39 Association.

The CA&#39s research – published a month before the Treasury announces its decision on whether it will vary the price cap – shows that 72 per cent of consumers would choose to invest in a savings account rather than a stakeholder pension with a 2 per cent charge.

Eighty-three per cent of respondents said an increase to 2 per cent would make a “big difference” to whether they took out a stakeholder and 79 per cent said the same if the cap was raised to 1.5 per cent.

But life offices say the Government&#39s three-year experiment with selling cut-price pensions has failed, with sales of individual pensions almost grinding to a halt.

Some life offices argue that it is the shape of the charge that is at fault and are calling for an initial charge and ann-ual management charge model instead of a flat rate.

CA principal policy adviser Mick McAteer says: “The bottom line is that the Government&#39s pension policy is in ruins but reversing the price cap would be misguided because it would price more people out of the market, reduce incentives to invest in a pension and risk massive misselling.”

Norwich Union head of pensions development Iain Oliver says: “What the Consumers&#39 Association is trying to say is that people will buy pensions because they are cheap. This was the view of the Government in 2001 before a three-year experiment that shows the opposite is true.”


FSA castigates basic errors by brokers

The FSA says simple errors by firms completing application forms for authorisation to continue writing mortgage and general insurance business are causing delays. To deal with the problem, which is slowing down the regulator&#39s processing of the 5,000 applications received to date, the FSA is posting on its website a list of the most common […]

Correspondent&#39s week

Is the housing market about to fall off a cliff just as the stockmarket did four years ago? And how long before the damage caused by the stockmarket crash is fully repaired? Those thoughts ran like a thread through the past week. Like many wives, mine is addicted to TV programmes which tell us to […]

Edinburgh Partners – UK Opportunities Fund

Type: Oeic Aim: Growth by investing in UK companies Minimum investment: Lump sum £10,000 Investment split: 100% in UK equities Place of registration: Dublin Charges: Initial up to 5%, annual 1.25% Commission: Subject to negotiation Tel: 0131 270 5570

Abbey in 15-Year Fix

ABBEY 15-Year Fixed Rate Type: Fixed-rate mortgage Fixed term: Until June 2, 2019 Fixed rate: 5.74% Minimum loan: £6,000 Maximum loan: Up to 95% of valuation subject to a maximum of £250,000, up to 90% of valuation subject to a maximum of £1m Income multiples: Three times principal income plus second or 2.5 times joint […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm