Life offices have confirmed that tens of thousands of pension term assurance policies are in the pipeline and are likely to be impacted by the Government’s expected withdrawal of tax relief.
Scottish Widows protection marketing manager Nick Kirwan says tens of thousands of policies will be impacted by the U-turn in the pre-Budget Report.
Hargreaves Lansdown head of protection Jonathan Briggs says: “Having spoken to several life companies a more disturbing likelihood is that there are a further 40,000 to 50,000 policies that are still in the pipeline and not yet completed. These people will not get tax relief beyond next April and are likely to be sorely disappointed.”
Another source from a life office estimates the number of policies still in the application process to be around 37,000.
Aegon Scottish Equitable protection spokesman Mark Locke says: “The industry is going to have to collectively communicate to customers who are in the pipeline that they will probably not be able to get tax relief on their life insurance. It looks as if customers in the pipeline will have to be put onto an ordinary term policy.”
Kirwan says: “I would be inclined to put any pipeline business on risk so they are covered but explain to consumers that the situation may change.”