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Pledges, legacies and backtracks

The Tories kicked off the pensions week in fine style by pledging to pay back victims of collapsed pension schemes within three months of the Party returning to office.

Shadow Work & Pensions Secretary Chris Grayling promised to set up a £30m a year lifeboat fund to help the estimated 125,000 pensioners affected since
1997 after their schemes collapsed.

Grayling said these pensioners would be a priority from day one if the Tories won the next general election and he slammed Prime Minister Gordon Brown for ³crippling² the pension system.

Not one to let such an opportunity get away, David Cameron also put the boot in, branding Brown¹s record on pensions as ³his worst legacy².

Cameron said: ³Gordon Brown¹s worst legacy is the destruction of this country¹s pensions system and we won¹t let him forget it.²

Away from the world of politics, the life offices were battling with a few legacies of their own.

Tomorrow decided to confuse everyone totally by sending out thousands of letters to customers and IFAs saying it was withdrawing the self-investment option on its closed book of deferred Sipp business.

Product manager Ray Chinn confirmed this would be happening from January
2008 but the following day Tomorrow issued a statement saying the letters had in fact been an error.

The use of the word error is perhaps understating the situation a little. It is difficult to see how sending out 20,000 letters to customers and advisers informing them that the Sipp option will no longer be available can be called an error.

A cynic might say it sounds a little bit like somebody got cold feet and changed their minds.

Commentators have suggested that perhaps Tomorrow and Admin Re, which administers the book of business, thought better of their decision after realising they would lose a lot of business as a result of the move. But clearly this is just speculation.

And finally, Suffolk Life has launched a trust based Sipp product which will allow customers to self-invest protected rights money.

The existing Sipp will be closed to new business from November but customers will be able to remain in the Suffolk Life Deed Poll scheme if they wish.

However, they will have the option to transfer into the new Sipp which will be available in late October and which allows a wider investment choice for ordinary pensions benefits, as well as the option of self-investing protected rights.

Speaking at the launch of the MasterSipp, Suffolk Life chief executive Henry Catchpole says he expects the Sipp market to grow from its current £40bn up to £500bn and says this presents a real opportunity for advisers and providers.

Estimates value the protected rights market at around £100bn with most of this money invested in insurance company funds.

However, there are very few Sipp providers offering a self-investment option for this market so it is likely to be a welcome move.

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