Tax relief will continue to be available on contributions in respect of any waiver of contribution benefit contracted for on or before 5 April 2001. However, with effect from 6 April 2001 tax relief will no longer be available in respect of any new waiver of contribution benefits contracted for on or after that date as they cannot form part of the pension plan. Instead any benefits which are payable from a "waiver" policy (which is outside of the pension plan) can be applied as a normal pension contribution to the personal pension arrangement.
As many individuals will prefer the current approach, where tax relief is available on the waiver contribution, this could lead to a surge in sales of regular contribution personal pension policies (including waiver) prior to 6 April 2001. In addition, more providers may decide to include waiver on single contribution policie