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NU and Standard clash over s32 closure

Norwich Union is closing its section 32 pension contract, saying the product is redundant, despite Standard Life revealing it has doubled its s32 market share.

NU says the Revenue’s announcement that pension scheme members will not lose any tax-free cash entitlements over 25 per cent if the trustees close their scheme after A-Day has killed the need for s32s.

NU is also closing its free-standing AVC, executive pension plan and Ssas offerings. This follows a similar move by Legal & General last week, which saw the firm closing its FSAVCs and executive pension plans from February 28 next year.

Head of pensions Iain Oli- ver says providers still push- ing s32s are showing their desperation by continuing at a time when individual s32 sales are difficult to justify.

Oliver says: “Some compet- itors are trying to despera- tely to preserve a product which does not have much of a life and you are hard pushed to justify individual s32 sales before A-Day.”

But Standard Life head of pensions policy John Lawson says s32s remain valid for a some clients and its market share has doubled in the past six months from the previous six months.

Lawson says: “Section 32s will still exist after A-Day and, in certain circumstances, there are reasons why you would want one. It does seem strange, especially since NU is closing its executive pers- onal pension and the place to put that EPP money is into an s32.”

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