An insurance provider has warned that the new Pensions Act may impact income protection policies.
Consumers' income protection policies may be affected by the Pensions Act 2008, an insurance provider has warned.
The Act, which received Royal Assent in November, aims to encourage people to have a private pension income in addition to their state pension. Starting from 2012, all eligible employees who do not have a good workplace pension scheme will be automatically enrolled in either their employers' plan or the new personal account scheme.
However, the age at which people will receive the state pension will also be increased and this could impact retirement planning, according to Unum. When the changes come into effect it's possible that individuals who are currently working may not be covered by their income protection policy to the age that they may now have to work in order to receive the state pension. Unum called on advisers to make their clients aware of this.
In an interview with Money Marketing the firm's head of retail marketing, Linton Penman, commented: "Although there is now a real need for most people to work for longer, statistics show that this may be compromised by the increased risk of serious illness that comes with getting older. This not only strengthens the general case for income protection, but also makes it increasingly important for advisers to recommend providers that are able to provide cover to older ages."
