View more on these topics

Low stakeholder sales raise compulsion again

Legal & General and Prudential, two of the highest-profile stakeholder providers have voiced concern over low take-up levels of plans, reopening the debate over compulsion.

In its annual results, Pru said it has set up 9,000 stakeholder schemes in the first half of this year, offering 340,000 employees access to stakeholder, but just 500 people – 0.15 per cent of the total, are contributing to plans.

Pru suggests that in 12 to 18 months it will be advising the Government to review take-up levels, potentially to reopen the question of compulsion.

L&G chief executive David Prosser calls upon the ABI to compile information on how many people take up stakeholder so the Government can accurately monitor sales and review compulsion if necessary.

L&G said 84 per cent of its new pension business had been on stakeholder terms but it described take-up by individuals as relatively slow.

Pru says life offices are reaching the limits on what they can justify in terms of marketing stakeholder to encourage individual contributions within the 1 per cent cap. It argues that ploughing too much into this risks pushing forward the break-even point even further on small business schemes.

Marketing director Sean Tompkins says: “In terms of the new market, where small businesses are designating a provider for the first time and people have not taken out pension provision before, there is not that much money coming in. If the Government wants to achieve its five million new individual savers, it may need to review whether some sort of compulsion is needed.”

Recommended

Price goes before a fall in scramble for distribution

IFAs are facing a tough dilemma as the scramble for distribution heats up and life offices start to approach firms with open cheque books. In last week&#39s Money Marketing, it was revealed that Clerical Medical representatives, at least at the level of broker consultants, have app-roached at least one national IFA and other smaller firms, […]

First National launches website

Abbey National subsidiary First National, which offers business finance to small to medium sized companies, has launched a new website for clients.The site at www.firstnat.co.uk is designed to give firms easy access to its products available through IFAs and directly from First National, the third largest asset finance house in the UK The site lets […]

Insurance premiums will continue upward growth

Insurance premiums will continue to rise over the next 12 months and possibly for the next three years according to two leading UK life offices.Both Royal & Sun Alliance and Norwich Union have predicted a rise in premiums, despite the fact some policyholders have seen rates rise 26 per cent during the past year.

Mercantile brings in new fixed rate

The Mercantile Building Society has introduced the two-year fixed rate mortgage.Available for loans of up to 80 per cent of valuation, the interest rate is fixed at 5.49 per cent until August 1, 2003. After the fixed rate period the mortgage will carry the Mercantile’s standard variable rate.There is a completion fee of £195 and […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com