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Standard pulls out of FSAVCs as sales Plummet

Standard Life is pulling out of the FSAVC market due to falling demand for the product since the introduction of concurrency under stakeholder.

The company has also repriced its existing FSAVC plans, its retirement annuity contracts and section 32 buyout transfers to within 1 per cent.

It says this means that around 85,000 customers will have a better deal.

FSAVC contracts will not be available from July 4 but existing customers will be able to make ongoing contributions and increments. There will be no change to the investment funds available on any of the contracts.

Standard says sales of FSAVCs plummeted by 44 per cent last year, with sales totalling only around £1m in equivalent premium income.

It says the new concurrency rules since stakeholder came in, which allow people earning less than £30,000 to use a stakeholder as an AVC, have reduced the demand for FSAVCs. In-house AVC offerings have also imp-roved by offering external fund links.

Marketing director Michael Leahy says: “There is now much more investment choice on AVCs and stakeholder, giving people fewer reasons to join an FSAVC. We will use the redeployed resources to give better terms for customers elsewhere.”

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