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Bonus bid to save stakeholder

Stakeholder pensions have received a boost with the Government planning a pension credit that will offer a top-up to people with modest amounts of savings.

While details of the plan will not be announced until the pre-Budget report later this autumn, pensions minister Jeff Rooker said at the Brighton conference that the Government will reward people who save by topping up their savings.

A DSS spokesman confirms that the pension credit will apply to stakeholder.

Everyone who saves will receive a top-up. For those who have savings that will not provide them with at least £90 a week, the level of the minimum income guarantee, they will receive a top-up for the money that they have put aside.

Individuals whose savings do provide them with more than £90 but who are struggling to make ends meet will still receive the top-up.

The scheme will take effect in 2003.

Labour MP and member of the Treasury Select Committee Jim Cousins says the Government&#39s plans are essential to the success of stakeholder. He says without this, it is doubtful that many people would be persuaded to save through stakeholder.

In an unscripted speech at the conference, Rooker said: “It does not pay to save in this country. The pension credit, at a stroke, changes this. If you save and have got savings we will top it up.”

Cousins says: “The pension credit is an essential building block to stakeholder pensions. Stakeholder pensions will not be taken up on a large scale until we know where we are going on the pension credit. Unless you do that, stakeholder has had it for its target market.”

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