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L&G takes strong line over pivotal age

Legal and General is mailing 115,000 of its clients to call for men and women over the pivotal age of 44 to contract back into a second state pension (S2P) by April 2008.

The group is undergoing the mailing exercise throughout the whole of November to make those aged 44 or over fully aware that the Government has enforced an arbitrary cap meaning your rebate is below the value of the S2P that person is giving up.

Due to a strong view on the cap, L&G has taken the proactive stance and decided that those customers who don’t have an IFA and refuse to respond to the mailing, will be automatically contracted back into S2P by April next year.

Those under 44 are also set to receive increased levels of national insurance rebate following a review by the Government Actuary.

L&G pensions strategy director Adrian Boulding says: “Our concern is that customers without an independent financial adviser may not be aware that their contracting out rebates have been capped by the Government. This is why, unless they specifically instruct us otherwise, we will contract them back in. It’s all clearly set out in our customer mailing.”

“ I believe that the amount the Government will pay into the Personal Pensions of customers under age 44 will offer them a realistic prospect of providing a personal pension of the same level as they are giving up by contracting out of the State Second Pension.”

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