Over a million savers paying into pensions run by Scottish insurers could be unable to claim tax-relief if Scotland votes in favour of independence next year, a senior industry figure has warned.
Insurers have privately agreed not to publicly discuss the implications of a “yes” vote due to concerns about the uncertainty this could create, but one provider told Money Marketing that because an independent Scotland would not automatically gain EU membership, the future of tax-relief on pension contributions could be thrown into question.
The source says: “At the moment, if you are in Europe, you get tax-relief if you contribute to a pension in another country. That is enshrined in European law.
“The problem for Scotland is the European Union has already said it will not automatically gain EU membership.
“So on day one of independence you would have a country outside the European Union which is not covered by the EU doctrine on tax-relief, which means the approximately 1.8m English customers paying into a Scottish company would not get tax relief and the 200,000 Scottish customers paying into an English company would not get tax relief.
“Independence is an unholy mess and it would be a disaster for Scottish financial services, which is why nobody wants to speak about it.”
There is also concern among insurers about the impact a “yes” vote would have on the Scottish financial services market in general.
One source says: “Who wants to serve a market with 2.5 million adults in it compared with a market with 50 million adults in it?
“You would end up with very few providers in the Scottish market.”
Forty Two Wealth Management partner Alan Dick says: “Independence could be a disaster for Scottish financial services.”