ASP take-up is tiny

November 25, 2009 12:47 pm by Alice Ross

Less than 3,000 people have taken out an alternatively-secured pension ASP) since this became an option in April 2007.

This is quite surprising – it shows how tiny this market is.

The figures come courtesy of AJ Bell, the self-invested personal pension (Sipp) provider, who got the figures today after making a Freedom of Information request earlier this year.

The tax charges are obviously putting people off. ASP is basically a way of leaving your pension invested in the stock market after you turn 75 – the official age at which you’re supposed to buy an annuity. Since 2007, investors have been able to do ASP instead of an annuity – but it comes at a cost, with benefits taxed at up to 82 per cent.

However this could change if we get a new government next year. The Tories are widely expected to change the rules around buying an annuity – probably by raising the age at which you have to buy an annuity to 80 or 85, or maybe ditching this “compulsory annuitisation” altogether. They could also lower tax charges in ASP. We’ll have to see whether that really does encourage take-up.

Posted in Pensions |
Print
Share
Print
Share


The FT’s Money blog is a forum for the latest news and insights from the UK’s personal finance scene. Matthew Vincent, the editor of FT Money and his team of reporters will upload their views and insights on what’s happening in the industry and how this affects people’s finances.

This blog is no longer active but it remains open as an archive.

Sign up for our daily email
Follow on twitter

About our bloggers

Lucy Warwick-Ching is the FT’s new Money Online Editor and has been a UK Companies reporter covering tobacco, pubs and leisure companies as well as the deputy editor on House and Home.

Matthew Vincent is the FT’s Personal Finance Editor and was previously the editor of Investors Chronicle, where he also devised the award-winning online video The Market Programme, and produced the BBC-FT standalone magazine ‘How to be Better Off’. He presents the weekly FT Money Show audio podcast, and previously worked on the BBC TV programmes Short Change and Pound for Pound.

Alice Ross is deputy personal finance editor of FT Money. She specialises in pensions, investments and investment trusts. Alice joined FT Money in April 2008 - prior to that she was deputy editor at Money Management magazine.

Ellen Kelleher has been a personal finance reporter in the UK for close to four years. Before arriving in London, she worked in the FT's New York bureau where she covered the insurance sector.

Steve Lodge is a personal finance reporter on FT Money specialising in savings.


Josephine Cumbo has written about all aspects of personal finance but currently specialises in insurance. She also covered company news for FT.com. Prior to working at the FT she was a news reporter for the ABC.

Tanya Powley is a personal finance reporter on FT Money specialising in mortgages and the housing market. Tanya joined FT Money in November 2009 after working in Australia covering personal finance for the Australian Financial Review and its sister magazine Asset. Prior to that, Tanya wrote about mortgages for UK trade newspaper Money Marketing.

Jonathan Eley is editor of Investors Chronicle, and has been with the title for ten years. Before that he worked for newswires and trade journals in London, New York and Hong Kong.

Money Matters: a guide

Comment: To comment, please register with FT.com, which you can do for free here. Please also read our comments policy here.
Contact: You can write to the Money Matters team using this email format: firstname.surname@ft.com
Time: UK time is shown on posts.
Follow: Links to the blog's Twitter and RSS feeds are at the top of the page.
FT blogs: See the full range of the FT's blogs here.