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Pension credits prompt NU call for trees review

Norwich Union says it wants a rapid review of decision trees by the FSA once the Government reveals further details of the pension credit.

NU says the FSA must aim to incorporate the pension top-ups into decision trees as soon as possible and review the trees more than once a year, which is the current plan.

The bill which would introduce pension credits is expected before the end of the year and pension experts anticipate further details will be unveiled in the pre-Budget statement on November 27 or shortly after.

So far, pension credits have only appeared as a paragraph in decision tree notes. This has not helped either the target audience using trees or IFAs dealing with target group individuals to make fully informed decisions about whether it will pay to save into a pension.

The pension credit has come under fire since it was first announced a year ago by Department of Work and Pensions secretary Alistair Darling, as some experts argued the payments would penalise modest savers by making them pay higher-rate tax on their savings allowing them to keep only 60p in every £1 saved.

NU director of pension development Jerry Barnfield says: “The FSA was hoping to have to review trees only annually but it looks like reviews will have to be much more frequent. There needs to be a strong message on pension credits referred to in decision trees.”

Scottish Equitable pensions development director Stewart Ritchie says: “The fundamental question remains – can the pension industry put hand on heart and say will it definitely always pay to save?”


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