UK - The government will not be issuing a separate consultation on ways to improve stakeholder sales despite announcing yesterday that it is to look at cutting red tape holding back the product.
The selling of stakeholder is heavily regulated to counter misselling.
The Department of Work and Pensions’ decision to examine methods to create greater incentives for consumers to purchase stakeholder comes just days after figures issued by the Association of British Insurers (ABI) showing disappointing take-up of the pension during the first eight months of its existence.
The government awaits a report, due in July, by former NAPF chairman Alan Pickering which will review pensions legislation.
ABI figures released this week revealed that around 570,000 policies had been sold as of the end of October with a large proportion of those likely to be transfers. The ABI has stopped separating the data which determined whether the policies taken out were transfers or new business.
But, according to Nigel Stammers, pensions strategy manager at Clerical Medical, stakeholder’s success will not be measured just in terms of take-up of the product itself.
He said: “Stakeholder has prompted employers to do a review, because if nothing else they have had to check their existing occupational schemes.
“The message the ABI has been pushing is that you should be looking at the overall impact that stakeholder would have had, because people aren’t necessarily ending up with stakeholder but they are ending up with something
“Occupational schemes will widen their eligibility to encompass more staff and have reviewed their contribution rates if they are money purchase, and so on.
“The important thing is that stakeholder has prompted some positive activity.”
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