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Tories fear unstable regime will deter savers

Conservatives warn that the pension term assurance U-turn will lead the public to fur- ther question whether it is worth saving and investing within a tax regime that is so unstable.

Speaking at the ABI Better Regulation conference, sha-dow Treasury financial secretary Mark Hoban said Chancellor Gordon Brown’s volte-face sends a contradictory message at a time when the Government is embarking on a major reform of pensions.

Hoban said the Government was well aware of how PTA would be used and to sudd-enly announce a change in policy so soon after A-Day leads him to question the thought process that the Treasury went through in the first place.

He said: “Did it understand some of the issues around the taxation of pensions?”

Hoban said the PTA saga was not in the interests of consumers, industry or the Government and called on Brown to think carefully about the lessons that can be learnt.

Hoban said: “For most people reading the articles, the headlines will send a message to them as to whether it is worth investing and saving in pensions when the tax regime is so unstable and unpredictable. The message we need to get across is long-term stability, not signals like this that will end up dissuading people from saving for retirement.”


Hutton defends Personal Account plans

Work and Pensions Secretary John Hutton has laid the Personal Accounts White Paper before Parliament unveiling measures to tackle accusations of levelling down and claiming the scheme will see between £4bn to £5bn of new saving.Hutton rejected Tory claims that setting the maximum contribution cap to at least £5,000 would lead to the back-door nationalisation […]

Wide of mark

“Everybody thinks that their wife is the prettiest” was a famous remark once made by Arsene Wenger. And it is an expression which best encapsulates the state of the intermediary mortgage industry within which some intermediaries continue to wage PR wars

ABI gives in to pressure on CI cover for cancers

The ABI has bowed to pre-ssure from Swiss Re and changed its statement of best practice on critical-illness insurance for two types of cancer.In light of medical evidence from Swiss Re which suggests that the two cancers may be malignant in some cases, the ABI has decided that the rare conditions will now be covered […]

Setback for ABI in proposed model

The Association of British Insurers appears to be losing its fight with the Investment Management Association over who should run personal accounts, say industry commentators.The Department for Work and Pensions’ second Pensions White Paper has rejected the ABI’s proposal for a personal account default fund which would split assets between competing branded providers on a […]

Scheme pays explained

By Fiona Hanrahan, senior product insight and technical support analyst We’ve received lots of queries on scheme pays and when it can be used. This article explains how it works and the conditions which apply. What is ‘scheme pays’? If an individual exceeds the annual allowance (AA) and an AA tax charge is due, they […]


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