Pensions term assurance dies a death

26 March 2007
The premature demise of pensions term assurance in this week's budget elicited angry responses from many insurance providers.

Less than 12 months after being introduced last April, the insurance, which gave customers policies that allowed them to claim tax relief on the premium payments at their highest or marginal rate of tax, was phased out.

"The government has killed off PTA," Bright Grey's technical product manager Ian Smart mourned.

"U-turns like this send out completely the wrong message to consumers about the need for protection," Scottish Widows' protection market director Nick Kirwan commented.

According to research from Moneysupermarket.com, one in ten life insurance customers in the UK had a pensions term assurance product.

The market "effectively lasted just nine months" because the government did not think the product through before introducing it, LifeSearch's head of protection strategy Kevin Carr protested.

"Such practice does nothing to improve consumer trust in the financial services industry," he added.

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