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New European regulation must not harm pensions automatic enrolment

The proposed European Consumer Rights Directive should improve consumer protection across Europe, but it must not be allowed to affect the ability of workplace pension schemes to automatically enrol employees, according to the ABI.

The ABI's Director of Consumer Affairs, Maggie Craig, gives evidence to the House of Lords European Committee on the Directive on Thursday 21 May. Speaking ahead of her appearance, she said:

"The UK already has very high standards of consumer protection, especially in financial services. For this reason, financial services are mainly exempt from the Directive's provisions, and we hope that this will continue.

"However, we have particular concerns that the Directive could be amended during negotiations to prohibit the use of automatic enrolment into workplace pensions schemes, a key feature of the Government's pension reform programme due to come into force in 2012. The ABI successfully persuaded the European Commission to agree that ‘inertia selling' bans in previous Directives would not apply to pensions automatic enrolment. Amendments to the Consumer Rights Directive must not be allowed to call this into question.

"The same concern applies to automatic renewal of insurance policies, a process which works well for consumers but which could be outlawed by this Directive. We are seeking guarantees that the Directive will not affect this long-established and understood practice."


Last updated 01/07/2016