Friends backs level playing field for protection business

Friends Provident says the Budget change that reclassifies new protection business and removes it from the longer ’I minus E’ tax structure has levelled the playing field in the market.

Friends said the tax structure was increasingly placing an unhelpful restriction on companies looking to compete in the protection market.Under the ’I minus E’ structure, companies which have a considerable amount of savings business could offset the expenses of writing protection business against the income of the savings business.

As this could then be passed on to the customer through pricing, some providers argued this tax treatment was unintentionally restricting the protection market to those with significant savings books.