View more on these topics

Contracting-out choice shifts from pivotal age

Product providers are moving away from using pivotal ages for contracting-out decisions, believing all policyholders should review their position in light of the new second state pension and lower investment returns.

Axa says men aged 56 and women aged 49 should be contracted in but believes people should hold off from making a decision as the rebate levels may change under S2P.

Norwich Union says 54 and 48 are its pivotal ages for contracting in but it is writing to customers to explain S2P and the investment risks of staying contracted out.

AMP, going against the grain, believes that 54 is an attractive age for men to contract out of Serps.

NU is also issuing IFAs with a contracting-out guide, giving information on the investment returns needed to outperform the benefits of S2P.

Royal & Sun Alliance has written to all its customers, telling them to consider contracting back in to S2P. It says pivotal ages are no longer appropriate and everyone needs to review their contracting-out decision.

The Government set out its contracting out-rebate levels last year and they will take effect from April when S2P starts.

Axa senior technical manager Tony Tollerton says: “The big question is whether anyone should be contracted out, whatever their age. The decision is very difficult because it depends on future rates of investment. It may be best to wait – there is a good chance that the Government might reconsider.”

Norwich Union director of pensions development Jerry Barnfield says: “The new rebate levels mean the benefits of contracting-out are more marginal.

“It depends on whether people think their investment will outperform S2P. It is not as simple as saying there is a cut-off age as attitudes to risk run across all ages.”


Industry will be hurt by CP121

Open letter to David Severn, Head of polarisation review, FSA Should the proposals outlined in the CP121 come into being, I believe that this willdamage the financial services industry and infrastructure andconfuse consumers by over-complication.The FSA needs to understand the basics of the industry it is empowered to regulate.The vast majority of products offered by […]

Royal Bank of Scotland joins postcode lenders

Royal Bank of Scotland is following other big lenders and linking the amount it lends to postcodes, this month&#39s Money Marketing Focus reveals.In internal document from the RBS, seen by MM Focus, the lender says it has revised its loan to values in 52 London postcode areas.The document says “the maximum LTV for amounts between […]

Cater Barnard bids for net portal

Financial advisory services provider Cater Barnard has put in a bid for internet-based broker portal Confida Mortgages for an undisclosed sum.Cater Barnard has entered preliminary negotiations to buy Confida as part of its strategy of becoming a pan-European IFA. If successful, the move will see the portal target the professional introducers&#39 market.Cater Barnard UK managing […]

Spittles appointed to ABI medical committee

The ABI has appointed Royal Sun Alliance chief underwriter Graham Spittles as chairman of its life assurance and medical affairs committee. Spittles has been R&SA’s chief underwriter for seven years. As chairman of the committee he will be looking at medical and other risk assessment issues in life and health products. Spittles is already a […]

Tax-free gains? That can’t be right, can it?

When he was Chancellor of the Exchequer, George Osborne made several changes to the way in which income is taxed. Personal allowances were increased significantly above the rate of inflation; a starting rate band was introduced for savings income and, with effect from 6 April 2015, this was assessed at 0 per cent. In addition, […]


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