The ABI's Saving and Long-Term Risk Raising Standards initiative is renaming with-profits market value adjusters as market value reductions in a bid to make the penalty clearer for consumers.
The requirement is not mandatory.
ABI spokesman Vic Rance says: “We decided it will be more useful to call adjusters a reduction as in practice this is what they are and it makes it clearer to customers they are a bad thing.”
IFA Diane Saunders says: “I often feel when dealing with many financial services products you use English as a second language and MVAs are a very good example of this. Adjustment sounds as if it could go up or down, so calling it a reduction has to be a good idea.”
A High Court case involving a UK pensioner will lead to the abolition of the age 75 compulsory annuity purchase rules on pensions according to a leading IFA.
Booth is representing pensioner Joe Singer, 75, in his fight against being forced to purchase an annuity with his pension fund and is challenging the rule under the Human Rights Act. Popplewell believes Booth will win the case within three years, removing the obligation for pensioners to buy an annuity and revolutionising retirement planning.
He believes Booth will base her case on the stance against ageism in the Human Rights Act and a European Union directive issued last year relating to retirement age.
The directive stipulated that member countries have until December 2006 to outlaw the practice of employers forcing employees to retire at a predetermined age.
Although the case may not be concluded for about three years, Popplewell says the Government could ask the Inland Revenue to remove the age 75 restriction earlier if Booth looks likely to win.
Popplewell says: “A system may be put in place involving a revised version of income drawdown and staggered vesting letting people gradually delve into their pension.”
The Treasury says it cannot comment ahead of a decision on the case.
LIA Conference report, p9