Pension term assurance (PTA) policies currently in force are set to become more expensive next year,...
Pension term assurance (PTA) policies currently in force are set to become more expensive next year, following Gordon Brown's decision to reduce basic-rate income tax from 22p to 20p.
The news came at the same time as the Government decided to axe tax relief on PTA, causing havoc in the industry. Nick Kirwan, protection market director at Scottish Widows, said the industry had wasted £35m "in developing products and systems".
Vanessa Owen, head of technical services at LV=, said: "We are very disappointed that, by withdrawing PTA, the Government has thrown away this opportunity to help close the well-publicised protection gap."
Kirwan added: "If we'd had a cohesive strategy before A-Day, we wouldn't have been in this position."
Complete U-turns send out a negative message to consumers about the need for protection, Kirwan said, adding: "This is a severe blow for consumers who will no longer have any tax incentive to protect their families."
