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In or out or shake it all about?

Could the decision to contract out or contract in become the financial planning equivalent of the hokey cokey?Money Marketing has become aware that at least one Government department has officials considering an increase in the contracting-out rebates.

The closest thing to an advice no-brainer – except perhaps for those who very strongly mistrust policians and what they promise at all – could become much more complicated again.

Pension companies have had two strategies for what to tell their policyholders. Some have said that, given the current likely performance of the contracted-out pension, all their policyholders should consider contracting back in. Others have advised them to consult their adviser but with the implication that if they are contracted out they should probably go back in.

But with officials examining the rebates, it could all change again. Once again,the UK’s savers could be the ones who are being shaken all about.

General knowledge

General knowledgeTwo big lenders have removed their offer of free Asu insurance to accompany mortgages. Nationwide and Nottingham Build-ing Society have done so already. Abbey National believes it may have to follow suit.

The reason is, of course, insurance regulation. Lenders believe they must charge customers to meet the costs of protecting them.

Many advisers argue that Asu is often a client’s first foray into getting covered and they may seek additional protection hopefully from an adviser who can accurately assess their needs.

But maybe not for these lenders’ customers now. Has general insurance regulation scored its first own goal?


Get on top of top-slicing

I am revisiting an old topic that still causes uncertainty, namely a comparison of the top-slicing position, where a client has gains under a single-premium bond effected with a UK resident insurer, compared with a bond effected with an offshore provider. I will also look at the position where a client has gains which are liable to capital gains tax in the same tax year.

Investment clock economic update

In the latest Investment Clock economic update, Ian Kernohan, Senior Economist at Royal London Asset Management, discusses the implications of the US Federal Reserve’s recent hike in interest rates and upcoming French presidential election. The value of investments and the income from them is not guaranteed and may go down as well as up and […]


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