The ABI is negotiating with the Inland Revenue to halt the predicted flood of transfers to stakehol-der from pension top-up plans after the Government's acceptance of par-tial concurrency.
The ABI is worried this scenario will create an admin nightmare for life offices.
It fears the tax-free cash benefit available from a stakeholder held concurrently with an occupational pension will lead to a rush of savers abandoning their free-standing additional voluntary contributions and additional voluntary contributions.
When the Government announced its plans to allow individuals to contribute to an occupational pension alongside a stakeholder this summer, it prompted predictions of the demise of the pension top-up market.
Many thought savers would be lured by the 25 per cent tax-free lump sum under stakeholder, a benefit not offered by either FSAVCs or AVCs.
ABI spokesman Malcolm Tarling says: “The disparity between the amount of tax-free cash under a stakeholder and that under AVCs and FSAVC has led us to look for scope to equalise the benefits.
“In theory, there could be a lot of people rushing to transfer which would cause an admin nightmare for life offices.”