Skandia says Government can’t justify Asp restrictions

The Government has failed to justify limiting the use of alternatively secured pensions and explain why offering them more widely could constitute abuse, says Skandia Life head of marketing Billy MackayThe Government says Asps are only designed for groups such as the Plymouth Brethren with religious objections to annuities but Mackay rejects its argument that the industry has wilfully abused Asps as an inheritance tax planning tool.

He says the restrictions are not enshrined in law so offering Asps more widely does not constitute abuse.

He says: “The fact that the rules said you could do this and many people did does not constitute abuse. I have yet to see any justification supporting limiting the use of Asps.”

Richard Jacobs Pension & Trustees director Richard Jacobs complained last week that Skandia is only offering Asps to self-invested personal pension customers.

Skandia responded that its plans to roll out an Asp option across its range have been frustrated by uncertainty over Government restrictions and concerns about the possibility of another pension U-turn.

It is inviting advisers and pension experts to send their views on Asps to ASP@skandia. co.uk and it will pass on these comments to the Government.

Mackay says: “How can you make a call on Asps when you are not sure about the size of the market? If its original purpose is to provide an option for clients with a religious objection to an annuity, the size of the potential market is hugely reduced.”