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&#39Stakeholder shifts up market to be PP&#39

IFAs and pension providers claim stakeholder is set to become little more than acost-controlled personal pension following recent statements from the Departmentof Social Security and the Treasury.

They believe the Government is finally beginning to come clean about its true intentions behind the stakeholder project.

Recent declarations by ministers seem to herald a move to shift stakeholder up market. This would avoid problems with the lower end of the market, such as the minimum income guarantee.

The claim follows a speech last week by Treasuryeconomic secretary Melanie Johnson in which she said stakeholder was for moderate to high-earners.

Speaking at the Horwath Clark Whitehill annual pensions lecture, Johnson said: “Further up the scale, wewant more moderate and high-earners to get into funded pensions.”

This followed a similar speech delivered by DSS supremo Alistair Darling at a recent ABI dinner, in which he also claimed stakeholder would be targeted at moderate to higher-earners, fuelling speculation of a Govern- ment U-turn as stakeholder had been originally intended for lower to moderate-earners.

Clerical Medical pensions strategy manager Nigel Stammers says: “The Government seems to be moving stakeholder up market.

“This should come as no surprise to anyone as stakeholder simply does not have the incentives necessary to persuade low to medium-earners to embark on long-term savings for the first time.

“In fact, the real disincentive is in the form of the minimum income guarantee.”

Informed Choice managing director Nick Bamford says: “If stakeholder is designed for moderate to higher-earners, it is definitely a contradiction to the original Government Green Paper.

“It appears stakeholder is actually a personal pension by another name and the whole focus of it has been purely to bring down the cost of pension provision.”

Move over Darling, p56


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