View more on these topics

‘Personal accounts may hit group protection’

Swiss Re is warning that personal accounts could damage the group protection market and increase the protection gap.

Head of technical development Ron Wheatcroft says employers may not feel incentivised to provide group protection after auto-enrolment in personal accounts is introduced.

He says: “Employers are more and more under the cosh financially and if they have to meet a pension contribution, they are going to look to find savings elsewhere.”

Aegon Scottish Equitable head of marketing for employee benefits Simon Bailey says: “There is a danger that personal accounts may lead employers to question the other benefits they offer in their package to employees. If it hit group life, that would be quite grave. It could potentially increase the protection gap.”

Around 40 per cent of life cover in the UK is provided by group schemes. Additionally, eight million people are covered by death-in-service and other group protection schemes.

Wheatcroft says: “It is rather easy to remove good quality group life sales as a cost-saving exercise. Often, the life cover that employees get through their employer is the only cover they have got. The employer could just close the schemes to recover costs.”

At the Association of British Insurers’ conference in London last month, pensions minister James Purnell ruled out introducing protection benefits alongside personal accounts, saying the Government wanted to keep the scheme as simple as possible.

Purnell said: “Add-on features such as death benefits have been suggested but I think the key objectives mean we need to be wary of adding on such bells and whistles.”

Wheatcroft says: “It is a bit disappointing that protection has been described as bells and whistles. It is a bit more important than that.”


Door reopens on HSBC Bric

HSBC Investments has reopened its GIF Bric Freestyle fund to investors following its temporary closure last June to protect performance for existing shareholders.

Yorkshire Building Society achieves full carbon neutral status

Yorkshire Building Society has achieved full carbon neutral status and has switched from its standard electricity supplier to ‘green electricity’ in all of its 131 branches across the UK.80% of all energy used by Yorkshire Building Society will be switched to energy produced from renewable sources over the next four months. The remaining 20% of […]

Money Portal chooses Intelliflo systems

The Money Portal has struck a deal with Intelliflo that will see its 1,200 advisers use the technology company’s Intelligent Office as their front and back-office systems.The system is already being used by 880 advisers and will be rolled out to TMP’s other advisers in the next few months.IO will replace TMP’s old technology infrastructure […]

Fees frame

Clare Bettelley looks at multi-manager fees and explains how the established players have adapted their styles.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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 thought leadership.

    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