THE TREASURY bowed down to industry pressure yesterday after it raised the price cap on the new ‘stakeholder' range of products to 1.5% for the first ten years, thereafter reverting to the 1% limit originally planned.
According to the Times, the Treasury’s decision to raise the cap came after fierce industry lobbying.
Gary Withers, chief executive of Norwich Union, said: “We’ve been tough on the 1 per cent charge because we felt it was depressing the market. This will open up parts of the market we can’t access at the moment.”
BUT WHILE the Treasury may have thought the industry would have been pleased with the new proposals, several life offices attacked the charge cap, arguing the rise was inadequate, reports the Scotsman.
Both Standard Life and Aegon said if the government pressed ahead with a 1.5% cap, Sandler products would be an “unmitigated disaster”.
Simon Douglas, Standard Life’s managing director of marketing, said: "The Sandler savings product is very unlikely to be successful with this price cap. The charging structure is a poor deal for consumers. For lower savings levels, it does not address the fundamental problems with the old cap."
Other firms, however, welcomed the Treasury’s announcement. Gary Withers, chief executive of Norwich Union Life, said the rise was "an important step in the right direction".
AT THE same time as the Treasury announced the new charging structure for Sandler savings products, the FSA issued a 120-page consultation document, suggesting salesmen of the regime may only need basic training, reports the Daily Telegraph.
If the regulator’s proposal goes through, unqualified salesmen will be able to sell pensions for the first time in nearly two decades, the paper says.
Since the Financial Services Act of 1986 came into effect, salesmen have not been able to advise on long-term savings plans without qualifications.IFAonline
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