Van Der Wielen says the Government is on the right track with its current set of reforms but he believes that plans for auto-enrolment do not go far enough.
He says: “My strong view is that compulsion is good but you must give the investor a choice of where to invest the money. The compulsion should not be dictating where you put the money but there should be compulsion on contributions.
“This is especially important for the younger generation, as research shows that people in Western economies are not seriously saving for retirement under the age of 45 and then they suddenly start investing in a big rush. The power of the effect of compound investment returns is huge for those who invest earlier.”
Buryfield Grange director John Fender says: “I have always felt that compulsion is the only way to get pension schemes to work on any substantial basis but totally free choice of provider and their funds should be allowed. If employers made specialist financial advice available, I think it would be even more successful.”
Royal London head of pensions strategy Steve Bee says: “The Government needs to change the means-tested support system it has in place which will take a generation to work its way through. It is trying to ignore the fact that it has an imperfect situation and patch it up with a pension scheme that it is trying to trick millions of people into but I think people will see through it just like they did with 10p tax and leave in their droves. The Government is using soft compulsion, a strange concoction of words, which to me means they are trying to trick the unwary.”