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‘The needs of seriously ill people have been ignored’

Treasury select committee member Jim Cousins has warned Treasury officials that the pre-Budget report on changes to alternatively secured pensions have ignored the needs of people with serious illnesses.

Speaking at a TSC meeting to scrutinise the PBR, Cousins suggested that before the new tax hit, Asps had been taken up by people with serious or terminal illnesses for whom the annuity regime was “deeply discriminatory”.

Treasury managing director of budgets, tax and welfare Mark Neale said Asps had not been primarily marketed to people with severe illnesses and the Treasury took action because the industry was marketing them to wealthy people using tax relief to pass on big sums after death.

But Cousins said just because Asps have been generally marketed to a certain section of the market does not mean that others have not taken them up.

Neale said Asps were still available to people not wanting to take up an annuity and the measures only restricted money being passed on death.

Cousins said: “Did it not occur to anyone in the Government that they would also meet the needs of people who had serious terminal or chronic illness and might find the annuity regime very restrictive for them? Did that not occur to anyone in the Government?”

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