You are here: Home - Saving & Banking - News -

‘No pensions chicanery went on here’ says FSA

0
Written by:
09/05/2007

There is no evidence of wide mis-selling of policies used to opt out of the State Second Pension (S2P), according to the Financial Services Authority (FSA).

The FSA has been investigating the sale of policies known as Appropriate Personal Pensions (APPs) since 2005 and it has ruled that many of the “contracted out” savers had made the wrong decision to buy an APP.

But the FSA has also acknowledged that the majority of the sales adequately met the regulatory standards of the time.

The chance for people to leave the S2P, and its precursor Serps, was Tory policy in the late ’80s and early ’90s, when the party wanted to expand private pension saving.

In return for opting out of the S2P, the Government pays part of an individual’s National Insurance contributions into an APP, which is then invested to turn into a lump sum for retirement.

Of the eight million APPs that were sold, about 120,000 – or 1.5% – were purchased by people too old to benefit from the product.

However, the FSA found that though some customers may have been wrongly advised to opt out of their S2P, many still had good reasons to do so.

“Some consumers may have wanted to leave their pension savings to their dependants if they died before retirement,” said an FSA spokesperson. “Or they may have preferred control over their investments rather than relying on Government pension policy.”

The FSA’s conclusion was welcomed by the Association of British Insurers.

Related Posts

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
EDITOR’S BLOG: Your money – poured down the drain

I took a stroll through the heartlands of British Government the other evening, and very affecting it was too.

Close