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Providers split over handling of Serps

Pension providers are divided over how to tackle the confusion surrounding whe-ther to contract in or out of Serps, with some contacting customers suggesting that they review their previous decisions.

The issue has arisen following the introduction of lower contracting out rebates from April, which will make the benefits of leaving Serps more difficult to judge.

Royal & Sun Alliance has written to all its customers alerting them to the possibility of contracting back in, suggesting they speak to an IFA and providing them with the necessary forms.

Friends Provident says it has also considered contacting customers suggesting that they review their decision but decided the exercise was too costly.

Norwich Union and Clerical Medical also say they will not be contacting customers.

The ABI is working on creating a standard form of contracting-out information for providers to send to customers.

Many life offices used to suggest a review of contracting out at certain ages but some now believe the decision is relevant to all customers because of the new lower rebates levels.

Royal & Sun Alliance asset accumulation leader Mark Birks says: “We have written to all our customers suggesting they review their decision and telling them to contact an IFA. It is a painless procedure to contract back in or out again.”

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