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Simpler pension regime set to &#39liberate&#39 advisers

The Green Paper&#39s simplification of the pension regime will liberate IFAs to return to being pension salesmen, according to Standard Life.

The timeframe for selling a pension will be reduced from between seven and eight hours to between three and four hours, which will allow IFAs to advise clients with monthly contributions as low as £75, says senior technical manager John Lawson.

Norwich Union has welcomed the Green Paper&#39s promise to consult on the 1 per cent price cap in the new year at the same time as the Government consults on Sandler as a chink of light.

The Government will also consult on the regulation of home reversion plans, which have so far remained outside regulation, and equity-release mortgage products so as to create a level playing field.

The proposals also include plans for a new pension regulator to proactively protect the interests of occupational scheme members and the Government will consult on whether Opra will remain or be replaced.

The unloved minimum funding requirement introduced in the wake of the Maxwell scandal is to be replaced by a more flexible proposal for scheme-specific regulation.

Deferring the state pension will be made easier and the Government proposes to allow people to choose between an increased state pension or – for the first time – to allow them to take a single, taxable lump sum.

Contracted-out benefits will also be simplified.

Immediate vesting will be encouraged so that all employees are entitled to benefits on joining a firm. The Government also says members should be allowed to transfer pension pots into a stakeholder. But providers say they would not welcome this as it could lead to a rash of very small amounts to manage.

Lawson says: “From a private pension point of view, this covers nearly all our concerns. Administration and communication with customers will be easier.”

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