A decision by the Financial Services Authority (FSA) to cut the lower projection rate for some investment products to 2% could deter many consumers from saving, provider LV= said.
The regulator has confirmed that, from April 2014, projection rates for tax-advantaged products like personal pensions are to be reduced. The new rates, previously 5%, 7% and 9%, will now be 2%, 5% and 8%, and the FSA hopes the move will give consumers more realistic expectations of their retirement income. But LV= said that, while the case for lowering the rates was "never in question", the regulator has missed an opportunity to change them for the better. "It is disappointing that the FSA has not made amendments to its original proposal following its consultation," said LV= Retir...
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