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Blight years

The pensions minister James Purnell has suggested that as much as 50 per cent of the money due to be invested in new pension personal accounts will come from existing schemes.

This is bad news for the industry but is it bad news for the Government? Why should they care? Here is why.

A failure to police the boundary properly between existing schemes and the new accounts throws every business calculation done by providers and advisers out of kilter.

The risk is there will be massive blight as decisions which should not be put off are put off with the system of voluntary persuasion – a system that probably could have got many more people saving if it had been given a chance. This reform is still far away and a resurgent Opposition might even scrap it but this breeds uncertainty. Forcing the pension industry to take business on existing terms while factoring in the risk of losing business at a later date is unfair.

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