View more on these topics

Treasury &#39guessed&#39 annuity reform cost

The Treasury has conceded it did not accurately calculate the cost of alternative regimes before opposing relaxation of annuity requirements.

Prime Minister Tony Blair said in the House of Commons last week change was ruled out because of the cost. The Budget Red Book claimed it would cost hundreds of millions.

Money Marketing understands that, without executing full calculations, the Treasury has guessed the alternative regimes proposed would cost around £400m a year.

Five Parliamentary questions from across the political divide have been tabled to uncover the cost basis used by the Treasury. Those tabling questions include Labour peer Baroness Turner and MP Jim Cousins, Conservative MPs Sir George Young and Howard Flight as well as Liberal Democrat MP Sir Robert Smith.

Tory pensions spokeswoman Jacqui Lait plans to raise the issue on the next Opposition Day on April 2.

A Treasury spokesman says: “We have not figured it out down to the last penny but our position is this would cost considerable sums of money.”

Lait says: “It seems a very casual approach to money. I rather suspect the Prime Minister panicked and said the first thing that came into his mind.”

Winterthur Life pensions strategy director Mike Morrison says: “This demonstrates there is no getting away from the serious support for reform.”

Recommended

Canada Life offers Fidelity funds

Canada Life is to offer its Annuity Growth Account policyholders access to two of Fidelity&#39s range of funds. The AGA allows policyholders to defer the purchase of a lifetime annuity past age 75. Canada Life says IFA feedback shows they like having more choice when investing in the AGA and the Fidelity agreement is the […]

K10 is no canine

In recent months there has been a lot of speculation about whether or not the FSA will make drawdown a permitted activity. While there is certainly a large body of opinion in favour of this approach, the current FSA review is still under way and it is as yet unclear what conclusions will be reached. […]

In the spotlight

Although I have withdrawn from financial services work I continue to read bulletins and the like issued by product providers, and also those flowing from composite insurers. One of the best bulletins I have ever encountered is the February 2001 issue of Spotlight, published by Winterthur Life. Anyone working in the financial services field, particularly […]

The new pension prizes

This year sees a number of major changes to pensions. Stakeholder is the dominant word in the new pension universe but the opportunities are not just limited to those provided by the launch of stakeholder. Here are 10 ideas that I believe IFAs would do well to exploit over the next few months. Pensions and […]

The Perils of Passive Investing

The era of loose monetary policy created an environment that rewarded passive investors in the US. However, with the US raising interest rates for the first time since 2006, Felix Wintle explains why he believes active investing will be more important than ever. In the video Felix discusses: The rising cost of capital and its […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment