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Shadow Chancellor says there must be no backtracking on Asps

Conservative Shadow Chancellor George Osborne has criticised Government dithering over alternatively secured pensions, claiming it would be extraordinary to scrap or disadvantage the product at this stage.

Speaking at the Pep & Isa Managers’ Association conference last week, Osborne said it would be wrong to waste industry money spent developing and marketing Asps and there was no reason for the Government to be so dogmatically opposed to this “small opening” of the annuity rules.

Osborne was a Shadow Treasury minister when the A-Day rules passed through Parliament and said the Government was aware from the outset that the industry would exploit the freedoms to market the product more widely than to the Plymouth Brethren.

Osborne indicated that a Conservative Government would overhaul the annuity rules radically although he said it was too early to produce specific manifesto pledges.

He said as long as an individual puts in place arrangements to ensure they will not be reliant on the state, the Government should not force them to annuitise.

Osborne attacked Chancellor Gordon Brown’s record on pensions, including scrapping advance corporation tax relief on dividends and last year’s public sector deal.

He said: “It would be extraordinary now for the Government to backtrack on this. The costs the industry has put into developing and marketing Asps will be wiped out in a similar way to last year’s Sipp U-turn. It knew from the outset the industry would market the product in the way it has.”

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Tenants’ extra

Commercial property has had a very good run over the past five years, with unit trusts which invest directly in property rather than property shares showing returns of around 12 per cent a year to October 1, 2006. I do not expect this rate of return to continue because quite a lot of the performance was due to falling yields but I do expect returns to be in high single figures.

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