PTA: The saga continues as the industry awaits further instruction by The Treasury
By Johanna Gornitzki
The pension term assurance (PTA) saga is unlikely to end anytime soon after industry experts revealed that it is doubtful The Treasury will make any announcement before the Budget is published in April.
Industry experts, who have been in discussions with The Treasury, admitted that an imminent decision is no longer on the cards.
Fay Goddard, deputy director general of the Association of IFAs, said: "Early indications were that something would be announced before the Budget. However, we no longer know, so there is not a lot we can say. I guess no news is good news."
Nick Kirwan, chairman of the Association of British Insurers (ABI) Protection Committee, said: "My understanding is that The Treasury has made no decision yet when it comes to PTA. What we are hoping for is some clarification in the Budget."
However, before The Treasury reaches a decision, Kirwan hopes that it will be consulting with the small group of industry experts that the ABI has put together to help it come to a conclusionon PTA.
"I hope they don't just publish something without first consulting with the smaller group that they have been working with. Because there is a risk something will get lost in translation," he said.
He added that The Treasury is still considering a range of options on PTA. "The middle-range option could be workable and if that is the outcome there are good reasons to be very pleased," he said.
Meanwhile, Royal Liver has launched an email marketing campaign to help advisers manage their pipeline PTA applications before the Budget announcement.
Pipeline business must be placed on risk by midnight 5 April 2007 or they risk losing the tax relief on their premiums should The Treasury decide to scrap tax relief on PTA.
Andy Milburn, IFA market manager at Royal Liver, said that intermediaries had responded favourably to the campaign and that it had already reduced the number of pipeline PTA cases with the provider by 50%, with the majority of those applications placed on risk.
He explained: "The emails provided each adviser with a tailored list of their pipeline customers and application details. Further emails were issued to advisers who have multiple applications in our new business pipeline for the same customers. These included details of both PTA and, if relevant, any ordinary life cover applications that were either in the pipeline or on risk."
Another series of emails is planned over the next few weeks to try to get as many PTA applications on risk as possible.
