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Firms slam Treasury stand-alone claims

Pension term assurance providers have hit out at Treasury claims that PTA was never intended to be sold as a stand-alone policy.

Providers say that the Government was given ample warning that it would result in a rash of rebroking.

Sources at the Treasury suggest that the tax relief was only intended for PTA policies sold alongside a pension savings vehicle.

But Aegon Scottish Equitable head of industry development Peter Williams says he chaired over 20 HM Revenue & Customs workshops for IFAs in the run-up to A-Day and made clear in his presentations that the introduction of tax relief on life insurance would lead to massive rebroking of policies into stand-alone PTA.

Williams says: “There were speakers from HM Revenue & Customs at the events and at every workshop we tal- ked about the massive switchover of life policies which would occur as a result of the new rules.

“For them to turn around now and say that they are surprised by this is comp- letely wrong.”

According to Williams, HMRC never raised any concerns about introducing stand-alone pension term assurance after hearing presentations on the impact that this would have on the life insurance market.

Sources at the Treasury also say the clampdown on tax relief is aimed at those people who are “tax-dodging” by buying stand-alone PTA.

Bright Grey products director Roger Edwards says: “If PTA was never intended to be allowed to be sold as a stand- alone product, then why did the Treasury write the rules allowing it?”

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