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Widows slams drawdown deadline

Scottish Widows has criticised the Treasury after becoming the latest provider to confirm it will not be able to offer a flexible drawdown product by April.

The Government is pushing ahead with its reforms despite industry calls to delay until 2012 after providers said they would struggle to update their systems.

Money Marketing revealed Prudential had ruled out offering flexible drawdown ahead of the Treasury’s deadline while Aegon and Standard Life admitted they would struggle to have a product ready.

Scottish Widows head of pensions market development Ian Naismith says the company is unhappy with the Treasury’s approach. He says: “The problem is we do not have the legislation in place yet and we do not have the FSA rules in place, so it is almost impossible to develop anything with any confidence at the moment.

“I think very few providers will have flexible drawdown in place by April. It just seems too risky to start developing something now. We will not have a flexible drawdown product ready for April and we are unhappy with the way the Government has gone about it. The priority seems to be to get it done quickly rather than to get it done in an orderly fashion.”

Last week the FSA issued a consultation on amendments to its Cobs rules to accommodate the proposed changes. Industry responses are due by February 6.

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