Aegon Scottish Equitable believes the Treasury may reconsider its position over the withdrawal of tax relief on stand-alone pension term assurance.
It is urging IFAs and providers to write to the Treasury and lobby against the U-turn by citing how PTA was helping to close the protection gap. Head of marketing, protection, Rod McKie says: “There is a strong case for keeping stand-alone PTA and therefore there is a possibility that the Treasury could reconsider its position. We are hopeful it will listen.”
McKie believes it may be possible to reach a compromise and says he is cautiously optimistic of a favourable outcome for PTA providers.
The Association of British Insurers and the Investment and Life Assurance Group are meeting with the Treasury next week to put forward issues from providers and to ask for further clarification on the implications of the withdrawal of tax relief.
Royal Liver says the industry needs to know what is going to happen and whether PTA will still be sold if it is linked to a pension.
Royal Liver IFA market manager Andy Milburn says: “The feeling is that the Treasury wants to keep PTA alongside pensions and use it as an incentive to take out pensions but it is not going to happen. What are the logistics if a customer has a pension with a different provider to the provider supplying the life policy?”