The ABI says that following extensive lobbying by itself and other organisations, the Government has agreed to ensure strict limits on the contributions that people can pay into personal accounts.
There will not be a higher contribution cap in the first year of personal accounts, and no facility to add lump sum contributions, although this will be reviewed in 2017.
The ABI says this decision will help to ensure that personal accounts stay focused on their target market of low and moderate earners, complementing rather than competing with existing private pensions.
ABI director of life and savings Maggie Craig says: “It’s good news that the Government has acted on this important issue.
“Enabling a higher first year limit, and the payment of lump sums into personal accounts, would potentially have damaged the existing pensions market and therefore hit the people who save in them.
“This is a good result for the millions of current and future savers in private pensions.”