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Winterthur best advice fears over annuities

Winterthur Life has written to Chancellor Gordon Brown outlining fears that the current annuity regime forces IFAs to seriously compromise best advice.

The company is also challenging Brown&#39s Budget report assertion that the alternatives presented to the Government would cost millions to implement.

Referring to recent research carried out by the Department of Social Security, Winterthur says the low return from annuities is undermining confidence in pension provision as a whole. It fears that an increasing number of people may start to seek inappropriate alternatives to pensions as a means to provide for their retirement income.

While Winterthur recognises the Chancellor&#39s cost concerns, it strongly urges that cost should not act as a barrier to reform.

It highlights alternatives introduced in Ireland and Australia which offer greater consumer flexibility without dramatically eroding Government revenue streams.

Pensions strategy manager Mike Morrison says: “The integrity of an IFA&#39s advice is seriously compromised by the regulations which result in them having to recommend a product which in many circumstances represents poor value. The existing regime forces IFAs to recommend annuities, which are not always the most suitable products.”

Winterthur is awaiting a reply to its request for a meeting with Brown after the Parliamentary Easter recess.

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