Skandia say offering alternatively secured pensions, ASPs, can encourage greater pensions savings.
The point is being made by the provider in documents put to the government ahead of the Pre-Budget Report next week.
It says ASP is seen by customers as a way to overcome lower pensions savings brought about by fears of being forced to acquire an annuity at age 75, with the resultant risk of death undoing a lifetime of savings.
ASP also offers greater flexibility for customers on issues of investing and receiving retirement benefit, Skandia adds.
However, the government needs to review taxation of ASP, including simplifying IHT treatment of such policies, to turn ASP into an issue of choice based on investment rather than tax.
The government should furthermore review rules on secured and unsecured income, to ensure consistency in rules on income withdrawal pre- and post-age 75.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Jonathan Boyd on 020 7484 9769 or email [email protected].IFAonline
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