Government 'damaging pensions with dogma' on ASPs

The government has been accused of being swayed by dogma in preference to consumer demand and logic in its stance on alternatively secured pensions (ASPs) and damaging confidence in the pension system as a result.

Winterthur claims that The Annuities Market paper published by HM Treasury following the pre-Budget report last month indicates that ASPs will be restricted in order to prevent pensions money being passed on to descendents.

Mike Morrison, pensions strategy manager at Winterthur Life, said: "With its latest plans to restrict the benefit of ASP through increased tax charges the government is using a sledgehammer to crack a nut."

He added that plans to tax up to 70 per cent of payments made to non-dependants is both disproportionate and "against the spirit" of proposals to simplify pensions in the UK.

In December, Citywire claimed that the government's plans had in effect "killed off" the use of ASPs by pensioners.