The Treasury is set to concede the 1 per cent argument, pushing up the price cap to 1.5 per cent for its suite of Sandler products.
The much anticipated ann-ouncement regarding the price cap is due this week, with a major policy reversal coming from the Treasury.
With industry big hitters such as Norwich Union, Standard Life and Scottish Widows saying they won't play at 1 per cent, the Government appears not to want to see its new savings products fail as its flagship stakeholder pensions have.
The rise is likely to be 0.5 per cent to get as much of the industry on side as possible.
Even at 1.5 per cent, IFAs say they are unlikely to sell Sandler products as it remains uneconomical unless they are running mass market businesses.
Bloomsbury Financial Planning managing director Jason Butler says: “I don't think it is viable for IFAs to be advising on Sandler, I think most IFAs should be moving towards a fee-based business, differentiating themselves from the products they sell.”