Life companies are targeting the self-employed for new business in the run up to the Hallowe'en income tax deadline.

Irish Life and Hibernian Life & Pensions this week announced moves to attract custom from self-assessed taxpayers, who traditionally look to contribute to a pension before the tax deadline to offset contributions against their final tax liability for 2002.

Hibernian is pursuing the personal pensions market by offering an incentive on its Clear Plan product for October. The firm is granting an extra 1 per cent allocation on regular premiums for the full term of the pension to customers who sign up to the pension in October.

This means 1 per cent more of a customer's money will be invested in - or allocated to - the pension fund, rather than taken out as a contribution charge and kept as profit for the insurer or used to pay a broker.

This results in an allocation rate of 96-101 per cent on regular premium business, depending on the contribution levels.

For single premium business, the allocation rates for October increase by 0.5 of a percentage point and range from 99 per cent for people contributing €5,000-€7,499 to 103 per cent for premiums exceeding €25,000. The incentive does not apply to Hibernian's standard Personal Retirement Savings Account (PRSA) or to its three non-standard PRSAs.

Advisers have predicted the death of old-style personal pensions following the introduction of PRSAs. Standard Life recently stopped selling personal pensions altogether. But Hibernian claims personal pensions remain a separate market to PRSAs.

Mr Ian Veitch, life marketing and product development director for Hibernian Life & Pensions, said some self-employed people who wished to put aside €1,000 or more a month, considered themselves to be "astute" investors, and wanted a wider fund choice.

In the past, personal pensions commonly featured "front-loaded" charges of more than 50 per cent in the first year and a variety of other charges said to confuse consumers.

Most of these have turned out to be unsustainable following legislation introducing PRSAs, under which insurance firms can only impose two types of charges.

Charges on standard PRSAs are limited to a 1 per cent annual management charge and 5 per cent of contributions, a benchmark that has driven down the cost of personal pensions.

Under Clear Plan, clients will be charged 10-15 per cent in the first year, depending on the intermediary they approach. But Mr Veitch argued that the charges could be more competitive than those under PRSAs for people contributing high amounts over a long term.

Meanwhile, Irish Life has introduced a tracker bond product wrapped in a pension, meaning it offers investors the same tax relief on premiums they would receive on contributions to a straightforward personal pension or PRSA.

People receive full tax relief on pension contributions up to a limit of 15 per cent of earnings for people under 30, 20 per cent for people aged 30-39, 25 per cent for people in their 40s and 30 per cent for people aged 50 and over.

Called "Secure Investment Options", Irish Life's "pension tracker" has a minimum investment of €5,000 and a term of just five years, 11 months.

Mr Tony Lawless, pensions marketing manager for Irish Life, said the product was suitable for people who did not have long to go to retirement and who were nervous about investing in equities in the short term without the safety of a guarantee.

Typically, people seeking guarantees on a pension investment buy a with-profits pension. But bonus rates on with-profits products are declining.

"People looking for capital security but also want an upside are turning to trackers," Mr Lawless said. Irish Life is still selling personal pensions, Mr Lawless confirmed.

"Having said that, most of our sales at this stage are PRSAs, not personal pensions."