ABI hails government concessions on pension term assurance

Thursday, 12 April 2007 12:00 AM

Commenting on today's announcement that insurers will now have until 31 July 2007 to process both 'pipeline' Pension Term Assurance applications received before 13 December 2006, and life assurance bought by midnight on 12 April 2007 with a personal pension and intended to be part of the protection provided by that pension, Stephen Haddrill, the ABI's Director General, said:

"The Government's decision to remove tax relief from PTA was unnecessarily complex and bad for consumers. We are pleased that the Government has worked with the ABI to find solutions to the some of the problems the Budget statement led to. We look to it to learn from the review of the way in which it handled the PTA issue that it is currently undertaking.

"We will press politicians of all parties to raise the issue during Parliamentary debates on the Finance Bill. Politicians of all parties will want to know why it is no longer possible to get tax relief on life assurance cover bought with a personal pension."

Notes for Editors

1. 'Pipeline' PTA applications are those which had been received by insurers on or before 13 December 2006 but had not yet been processed. They will continue to benefit from tax relief, subject to conditions set out in the Treasury statement, and companies now have until 31 July 2007 to process those applications.

2. Applications to take up an option for PTA which formed part of a wider pension plan or arrangement, where the pension plan was taken out on or before 13 December 2006, or alongside the PTA application between 13 December 2006 and 12 April 2007, will also continue to benefit from tax relief, subject to conditions set out in the Treasury statement. Companies have until 31 July 2007 to process those applications.

1. Where an individual held a PTA contract as part of a pension plan prior to 13 December 2006, and has applied to increase term assurance cover or the period of that cover, they will not lose tax relief on that policy provided the application was received by the insurer by 12 April 2007.

2. The ABI is the trade association for Britain's insurance industry. Its nearly 400 member companies provide over 91% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a sixth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.

3. An ISDN line is available for broadcasts.

Copies of all ABI news releases, together with other information from the Association, can be seen on our website http://www.abi.org.uk

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