Consultants Watson Wyatt has warned that life offices will have to move fast to avoid the potential for misselling of PTA following the Government’s expected withdrawal of tax relief on policies.
Watson Wyatt says life companies will need to rapidly modify sales literature relating to PTA products and warn clients that all pipeline cases may not be eligible for tax relief in order to avoid misselling.
The costs to the industry of the removal of tax relief is not yet known but Standard Life protection marketing man-ager Mick James estimates it to be in the millions of pounds.
Watson Wyatt senior strategy consultant Mike Williams says: “PTA’s withdrawal represents another cost burden for insurers and, in consequence, consumers. The problem is that when insurers are for- ced to incur additional costs, these are ultimately funded by consumers.”