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Tesp test for friendlies

The Association of Friendly Societies is keeping a watching brief on the Sandler consultation, fearing it could damage friendlies.

The original plans last summer included calls for the end of qualifying polic-ies, meaning friendly societies would no longer be able to sell tax-exempt savings policies which form their staple business.

In the AFS 2003-2004 yearbook, House of Commons Treasury select committee chairman John McFall says he was “greatly concerned” that the future of many societies could be under threat but says he is now reassured that Chancellor Gordon Brown and Treasury Financial Secretary Ruth Kelly are sympathetic to the concerns and the imminent threat has been averted.

But, as Tesps are subject to further consultation, McFall is urging friendly societies to maintain pressure on the Government over the role they play in providing savings for lower-income earners.

AFS secretary Doug Thow says it has put together some “fairly forceful” evidence that Tesps are a unique product for friendly societies and had been successful over the years in bringing in lower earners.

Thow says: “It does not mean that the subject has gone away indefinitely but we have not seen or heard of anything further. We are maintaining a holding position on that.”

A Treasury spokesman: “The Inland Revenue are considering it in light of wider tax reforms.”

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