December 7, 2006
Potential removal of tax relief on life assurance
In yesterday's pre-budget report Gordon Brown announced that the government are conducting a review of Pension Term Assurance (life assurance with tax relief).
The crux is that the benefit of tax relief on premiums may be withdrawn. Our hope is that this will not apply to retrospective policies that are already in force. In response to the news, some of the leading providers have suspended accepting new applications and 'pipeline' cases will not be placed on risk until the situation is clarified by the government.
Louise Colley, Head of Protection Marketing at Norwich Union said: "We are concerned at the lack of consultation which has led to confusion for providers, advisers and customers alike, and will be making representations to Ministers. We are now defining how we treat pipeline business, our aim being to minimise the impact on both customers and advisers."
What Should You Do?
If you have applied for a policy that is not yet in force you should contact your adviser to discuss your options, although it's unlikely they'll be in a position to give you a definitive answer. The next step is to wait until more news is received from the Treasury.
Filed under Pensions, Protection by Ray Prince
