Life offices to draw up plan B for personal accounts
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A consortium of leading life offices has been established to draw up a plan B alternative to personal accounts as the Conservatives continue to voice their concerns about the scheme.
This week’s Money Marketing reveals the consortium, set up by IBM, is made up of major providers including Standard Life, Aviva, Legal & General, Friends Provident and Prudential. The group had its first meeting via tele-conference last week.
One of the tabled proposals is a software platform where the employer or employee could choose a pension scheme from a range of pension providers and the personal accounts option.
One source from the plan B group said “nothing is on the table but nothing is off the table”. Another source said they will look at whether the industry could provide a low-cost alternative to personal accounts and whether stakeholder could be revitalised.
The Conservatives have approached pension providers individually and asked them for ideas of how to improve personal accounts as well as suggestions for an alternative.
Shadow pensions minister Nigel Waterson says the Tories will be going into the election with “a plan B in our back pocket” and says they will review where the Personal Accounts Delivery Authority has got to and decide whether or not to proceed with the scheme.
Waterson says the Tories are committed to Turner’s proposals for a low-cost easy access pension scheme but that they are not committed to personal accounts and no contracts will have been signed before the election.
Waterson says: “The current procurement plan as I understand it, involves signing contracts with the main providers in about June next year which actually ties in rather well with a possible election date. So what it means is by the time of the election, nobody is going to be committed to anything and it is a perfect opportunity to just review where we are and where this is all going.”
Last week Money Marketing broke the news that the Tories are considering alternatives to personal accounts including a lifetime savings account and workplace ISAs.
IBM and the providers involved would not comment.
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