Axa's new UK group chief executive is bucking the trend among providers by
predicting stakeholder will not be made compulsory as this would be seen as
an admission of failure by the Government.
Dennis Holt admits the new pension has not taken off as well as the
Government may have hoped.
But he says forcing employers and individuals to make contributions would
reflect badly on the Government's ability to make it a success.
This contradicts the view among many pension industry experts that
compulsion will be introduced because forcing employers to contribute is
the only way for stakeholder to succeed.
Axa does not believe any form of pension provision should be compulsory as
it claims this creates the impression the industry cannot market products
well enough to encourage people to take them up.
Holt says compulsion would also position stakeholder as another form of
taxation and would not encourage people to provide for their future.
He says: “Stakeholder has not yet taken off as well as the Government may
have hoped but I hope it does not move to compulsion as that would be an
admission of failure.”
Aifa public affairs director Tracey Mullins says: “It is a politically
sensitive issue but it is likely that compulsion on employers to make
contributions is the only way stakeholder will work.”