Just 21% of UK adults with some form of traditional life insurance would consider a switch to pension term assurance, according to a survey commissioned by the price comparison website moneysupermarket.com.
The report, based on research carried out by YouGov on a sample of 2,359 adults in October 2006, shows that 31% of those with traditional life insurance would not even consider pension term assurance (PTA) and that 41% do not know whether it is something that they should consider.
The survey shows that around 17 million adults are certain that they would not consider PTA, but that this is mainly due to widespread misunderstanding. Indeed, 23% of those who said they would not consider making the change admitted that they do not know anything about PTA.
Emma Walker, protection manager at moneysupermarket.com, said: We believe that if providers and advisers explained this new product more clearly to customers, far more would consider switching to PTA to save money on their life insurance.
It’s important to point out that the product features of PTA won’t suit everyone by any means, but for millions of taxpayers it could add up to hundreds of pounds of free money from the government in terms of tax relief over the term of their policy.
Ms Walker continued so say that, although PTA came into force seven months ago, there are many who still believe that they need to have a pension to be eligible: The name alone is clearly putting some people off applying, she concluded.
Although basic rate taxpayers can save up to 22% tax relief and higher rate taxpayers can reclaim a further 18% through their annual tax return, many consumers appear to be unaware of this.