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Plea for a Govt rethink on PTA amid protection shortfall fears

Pension term assurance u-turn

Liverpool Victoria is hopeful that the Government will see the value of stand-alone pensions term assurance in helping close the protection gap and maintain the tax relief on the product.

Head of technical services Vanessa Owen says although she believes LivVic may be able to get round the restrictions announced in the pre-Budget report because of the different way in which it has structured the product to its rivals, it is calling on the Government to retain PTA.

Insurance companies have staged a mass exodus from the PTA market until further clarification is received from the Treasury over whether tax relief will be withdrawn from standalone PTA policies.

LivVic is the latest in a growing list of providers to temporarily withdraw from selling PTA while the Revenue consults on the future of the product.

Zurich confirmed it was shelving plans to launch its tax advantaged life insurance product, which is currently only available through Openwork, into the IFA market next January.

Bright Grey, Bupa, Aegon Scottish Equitable, Standard Life, Scottish Widows, Royal Liver, Norwich Union, Legal & General, Friends Provident and Lutine have all confir- med that they are suspend- ing sales of PTA and have removed the products from portals until further notice.

Advisers, including Hargreaves Lansdown, Lifesearch, Direct Life & Pensions and Torquil Clark Life Insurance have all stopped quoting on PTA business.

Owen says: “It is perhaps ironic that the PTA comment was contained in the section of the report called Building A Fairer Society. The abolition of PTA would cause inequality for large sections of society. In particular those who do not have access to tax advantaged life cover through occupational schemes.”

Zurich protection management director Peter Hamilton says: “It is widely acknowledged that too few consumers have the requisite life cover in place to meet their protection needs and the availability of tax relief was a welcome encouragement.”

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