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Provider role in Budget pensions guidance would trigger TSC inquiry

Committee says guidance must be impartial over providers and products 

The influential Treasury select committee will challenge Chan-cellor George Osborne if insurers are handed a role in delivering the Government’s retirement guidance guarantee.

The question of how the guidance should be delivered – and the role insurance companies should play – has divided the industry.

In March, Money Marketing revealed two major providers had raised the possibility of quitting the Association of British Insurers if it did not insist the guidance is offered independent of its membership.

Last week, Money Marketing revealed that the Treasury is looking to give providers a role in delivering the guidance guarantee set out by Chancellor George Osborne in March’s Budget.

In its report on the Budget, published earlier this month, the committee said the guidance must be “demonstrably impartial as to providers and type of product”.

Speaking to Money Marketing, TSC member and Labour MP Andy Love says: “We had a long discussion about this when we were concluding the report and I would be very concerned about insurance providers having a role in the provision of this guidance.

“The committee says it must be ‘demonstrably impartial’ and if the Chancellor does choose to involve providers it would go against the grain of that and the Treasury committee would definitely want to
look at it.”

Love is not the only committee member to raise concerns about provider involvement. In last week’s Money Marketing, fellow Labour MP Teresa Pearce, who sits on the Treasury and Work and Pensions select committees, said she would press for the Treasury committee to investigate if insurers were involved dir-ectly in giving the guidance.

In a statement to Money Marketing, TSC chairman Andrew Tyrie says: “Any information given under the guidance guarantee should be demonstrably impartial between providers. Impartiality will contribute greatly to ensuring that consumers benefit fully from the guidance and that they are made aware of the choices available to them.”

Rowley Turton director Scott Gallacher says: “The whole reason we are in this position is because providers have failed clients by not offering competitive annuity rates or promoting the open market option.

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