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‘Providers are in A-Day meltdown’

The industry is in the throes of a post-A-Day systems’ meltdown as providers struggle to deal with new pension business, according to IFA Richard Jacobs.

Jacobs, managing director of Jacobs Pensions and Trustee Services, says even straightforward pension requests are causing problems for the biggest insurance companies.

He says he has been chasing Friends Provident for six weeks for a client who wants to access their tax-free cash lump sum from a personal pension.

Friends acknowledges that it has all the information it needs but has still not processed the application.

Jacobs says: “The providers are literally going through a post-A-Day meltdown and are simply unable to cope. I do not think that anyone really was ready on April 6. The problem is that at A-Day, there was no new money in the retail sector. That is why you simply cannot trust any of the results for new business – there simply is no such thing.”

He says he has had similar problems with Clerical Medical although spokeswoman Polly Stewart denies that the firm is having systems’ problems.

In March, Jacobs warned providers that A-Day would cause admin backlogs that would severely hamper pension transfers.

Cathedral City Financial Services adviser Keith Jennings has been chasing Prudential since May to process an internal application. His client has a Pru stakeholder plan and wants to use the tax-free cash to buy an annuity.

Jennings says: “It appears that Prudential is stifled with applications. It should not take this long to deal with the turn-round for internal applications. The Pru will be put to task on this as a huge chunk of its market is in annuities.”

IFAs are still waiting for the Pru Sipp which was expected to be launched in the early summer.

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