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Winterthur adds clustering to s32 plans in bid to shelter tax-free cash after A-Day

Winterthur Life has revamped its section 32 plan to include a clustering facility to help preserve tax-free cash rights after A-Day.

The firm is extending the self-investment option available on its existing s32 plan to the clustered version, which it believes will differentiate it from rivals’ existing offerings in the marketplace.

Investors can hold stocks, gilts, unit trusts, investment trusts, deposit funds and commercial property in an s32 and in specie transfers will be accepted.

Winterthur says clients can create up to 50 identical policies or clusters, which will enable them to protect tax-free cash entitlements and phase benefits after A-Day.

Pensions strategy manager Mike Morrison says he expects a strong s32 market in the run- up to A-Day as advisers reassess clients’ pension arrangements.

He says: “There are a lot of people that have long service with their employers and who have built up tax-free cash lump sum entitlements over 25 per cent and these people will need advice before A-Day.

“Few product providers have totally flexible section 32 products so if you are transferring pension arrangements before A-Day, there is a danger that client entitlements to a higher amount of tax-free cash could be lost in the new regime.”


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Tied hands

Having read Simon Chamberlain’s essay arguing for the inclusion of multi-tied agents in Aifa, the same old question looms large.


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