Plan to end pension advice rule

The FSA recognised the move could lead to higher pension prices

BBC Radio 4's Money Box was broadcast on Saturday, 2 July, 2005 at 1204 BST.

The programme was repeated on Sunday, 3 July, 2005, at 2102 BST.

Read the programme transcript

The Financial Services Authority is proposing to relax a rule governing the way personal pensions are sold.

The rule - known as RU64 - was brought in six years ago in the run-up to the introduction of stakeholder pensions.

The regulator said its intention had been to avoid a "closing-down sale" of high-charging personal pensions which people would be locked into.

RU65 required advisors who were recommending a personal pension to put in writing to clients why it was at least as suitable as the low-cost stakeholder option.

However, the FSA is concerned it has been having an adverse effect on the market.

The regulator has launched a consultation on the topic.

Paul Lewis asked FSA manager Mary Hollinshed why the regulator wants to relax the rule.

And he discussed the issues with James King, Policy Adviser at the Association of British Insurers, and Patrick Connolly, a financial adviser from John Scott & Partners.

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Presenter: Paul Lewis
Producer: Louise Greenwood
Reporter: Chris A'Court