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ABI warns state should not subsidise personal accounts

The Association of British Insurers says personal accounts could damage existing provision and has warned the Government against any form of state subsidy.

At an ABI fringe event at the Labour conference, director of life and savings Maggie Craig said three issues must be resolved – ensuring no state subsidy, keeping the scheme targeted at people who do not have access to provision and not making it harder for employers operating existing schemes.

She warned pension minister Mike O’Brien that subsidising the scheme could run contrary to European law and present a huge danger to new and existing schemes.

She said the ABI continues to work with the Government to iron out the potential extra burden for group personal pensions due to the Distance Marketing Directive and Unfair Commercial Practices Directive.

Craig said: “Using taxpayers’ money to subsidise the charges would be unacceptable. The industry cannot compete if the Government subsidises personal accounts.”

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