A document detailing the outcome of a meeting held with the Treasury and industry members suggests that pension term assurance could be completely revived in the Budget announcement.
Money Marketing, which broke the story online last week, has seen extracts from the report of a meeting between Treasury officials and industry members which says: “It appears that the Treasury are not taking the Draconian line of banning PTA which was feared. Indeed, they appear to have accepted that they (or the ministers) overreacted to press comment.”
The document says the likely shape of the rules would see customers having to self-certify that they have some form of pension provision in place before being allowed to take out PTA.
The maximum sum assured is expected to be around 30 per cent of the lifetime allowance, or around 450,000, which covers around 95 per cent of current PTA cases.
A source says: “My understanding is that the Treasury wants ideas on how the points on self-certifying pensions could work in practice as it is the industry that would have to administer them.”
Investment & Life Assurance Group management committee member Ron Wheatcroft says: “Anything which did give the same scope to return the product to its former status would be welcomed. We would expect the Treasury to come back with some specific proposals at some point.”
A Treasury spokesman says: “A number of different proposals have been discussed but these are proposals the industry has put forward to us. They are not Treasury proposals and never have been.”
The document says: “Obviously this is not set in stone and the final details will not be known until the Finance Act 2007 is in place but it does look hopeful.”
The ABI maintains that it does not expect to hear anything until the Budget in March.