LIFESEARCH PRESS RELEASE
12th March 2007
Pension Term? We’re waiting for Assurance, Gordon
Consumers and advisers are waiting for the chancellor to end the current confusion surrounding the flexibility of pension term assurance (PTA) products.
In recent weeks protection specialist LifeSearch has received enquiries from clients looking to exercise the GIO (guaranteed insurability option) under their existing PTA policy. This is where the customer can increase their existing amount of life cover, without underwriting, in the event of a major change in their lives, such as marriage, a new mortgage, or the birth of a child.
However, right now LifeSearch, and the industry alike, should not advise existing policyholders to exercise the option until Treasury reveals whether or not any increases to existing policies will incur the loss of tax-relief. As such, all that can be done to is inform clients of the current confusion and write a separate new policy, without tax-relief. Or wait.
PTA BUDGET Q&A
Why should consumers be interested in PTA?
Most people need some form of financial protection and for many consumers PTA policies are the lowest cost form of Life Cover available.
Can consumers buy new PTA policies?
No. Product providers removed their products from sale immediately after the pre-budget report in December.
Will consumers be able to buy new PTA policies after the budget?
Possibly, it depends what the Chancellor says on, or before, 21 March.
Can consumers make amendments to existing policies?
We strongly advise consumers not to do so until Treasury confirm whether or not policyholders could lose tax relief as a result.
Despite the name, PTA is not a pension. It is life cover, as most people know it, with a few additional rules and the added value of tax relief on the premiums at either 22% or 40%, depending on the individual’s tax rate.
The new rules governing Pension Term Assurance came into force on 6 April 2006. However, these were suspended in the Pre-Budget Report on 6 December 2006 and resulted in the policy being pulled by many/all providers. However, nothing was mentioned about GIO options, which has resulted in the current confusion.
Enquiries
Kevin Carr, Head of Protection Strategy
Tel: 0207 065 1033 / 07887 838811
kevincarr@lifesearch.co.uk
LifeSearch can source case studies where required and can provide tables of typical premiums.
Consumers can contact LifeSearch on 0800 316 4242 or at www.lifesearch.co.uk
Notes to editors
About LifeSearch
With more than 200,000 customers, more than £13bn of cover arranged and 30 awards and nominations LifeSearch is the UK's leading independent life insurance and protection specialist offering advice to consumers on life insurance, critical illness, income protection and family income benefit.
Established in 1997 by Tom Baigrie and Arthur Davies of London based Independent Financial Adviser Baigrie Davies, LifeSearch has offices in both London and Milton Keynes. The company currently employs around 100 people, of which approximately 50 are qualified advisers.
LifeSearch prides itself on the quality of advice and high levels of service it provides - always offering the most competitive quote possible based on a client's personal circumstances.
Through LifeSearchCare, LifeSearch is also the only intermediary to provide its clients with free support and counselling provided by RED ARC.
Recognition of the service the company provides is reflected in the number of positive customer feedback forms LifeSearch receives. Since launch, this figure is in excess of 10,000.
LifeSearch Limited is an Appointed Representative of Baigrie Davies and Company Limited, who are authorised and regulated by the Financial Services Authority.
