The ABI (Association of British Insurers) says that today’s Pensions White Paper will create more savers, saving more for their retirement. However, the ABI will be seeking some changes to the detail of the Government’s proposals. The contribution cap is too high, and the confusion that still exists on means testing must be resolved.

Stephen Haddrill, the ABI’s Director General, said: “The Government has listened and accepted many of our key concerns, in particular the importance of allowing existing pension provision to thrive.

“But there is still a lot to be decided and we look forward to working with the Delivery Authority to ensure that the details of Personal Accounts are right.”

The ABI has drawn attention to several of the White Paper’s key proposals which reflect the insurance industry’s own position.

A series of measures will help guarantee that existing pension provision flourishes alongside Personal Accounts: these include a prohibition on transfers into and out of the new scheme; simple arrangements for ensuring that existing schemes are enabled to continue; and the introduction of a contribution cap for Personal Accounts.

Stephen Haddrill added:

“Attention now shifts to the new Delivery Authority, which must ensure both that Personal Accounts will succeed and that the rest of the pensions market can continue to grow and flourish. We remain concerned that the Government is unrealistic on costs and charges, particularly if it wishes the private sector to offer specialised funds, such as for ethical investment. The Authority must be expert and it must consult properly.”

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Notes

1.            Enquiries to:       

         Alan Leaman    020 7216 7440 (Mobile: 07957 482 330)

         Jonathan French   020 7216 7392 (Mobile: 07958 330 480)

         Malcolm Tarling    020 7216 7410 (Mobile: 07776 147 667)

         Lucy Butler        020 7216 7411 (Mobile: 07712 841 184)

         Kelly Ostler        020 7216 7415 (Mobile: 07968 364 302)      

2.            The ABI is the trade association for Britain’s insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a sixth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.