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Stakeholder sales surge

Figures show 62,000 new contracts taken out in first quarter of the year compared with 63,000 for whole of 2005

Almost the same number of new stakeholder pensions were taken out in the first quarter of this year as in the whole of 2005.

Research into the UK pension market by Defaqto, the Lyncombe Consultancy and Troika reveals that 62,000 new stakeholder contracts were taken out in the first quarter on a single-premium basis compared with 63,000 in the whole of 2005.

The report suggests that despite widespread opinion, IFAs are selling individual stakeholder products, with 53 per cent of the 500 advisers surveyed revealing stakeholder is their second most sold pension product after personal pensions on 82.6 per cent.

Positive Solutions executive chairman David Harrison says: “This shows the argument that advisers only sell to the rich and do not recommend stakeholder products is flawed.”

The majority of pension sales in the UK are single-prem-ium, rebroked business, with advisers seemingly moving away from regular-premium business, where commission levels are largely falling.

The figures on new singlepremium personal pension business in the first quarter this year buck the trend of consistent decline over the last five years.

Some 40,000 new contracts were sold in Q1 compared with 92,000 in the whole of last year. This compares with about 180,000 in 2000.

But only 5 per cent of the 200 consumers questioned said they trusted pensions companies to help them achieve the best results from their savings.

The 250 page report predicts IFAs will focus on the post-retirement market due to the wave of baby boomers approaching retirement and leave the pension accumulation phase to others.

Equal Partners managing director Vivien Starkey says: “Commission-based advisers may focus on the more lucrative end of the market such as post-retirement but they will be doing their clients a disservice. IFAs should be giving holistic advice.”

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