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Concern at admin chaos over flood of transfers

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&#39s 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.”

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