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Compulsion is morally wrong, says Standard

Standard Life is warning the Government that pension compulsion is morally wrong and it should instead bolster the state pension.

In its submission to the Work and Pensions select committee, Standard says it supports former pensions minister Frank Field&#39s proposals for a new partially funded state pension even though it would mean an end to contracting-out contributions.

Standard questions whether low to average earners can afford to save through stakeholder, claiming that the second state pension and pension credit act as disincentives.

It adds that compulsory saving would hit the living standards of the poor hard, and it would simply be seen as a tax on the poor who would see no benefit. Standard says the wealthy already save.

Senior technical manager John Lawson says: “Compulsion would result in really big sacrifices from those on lower incomes, which is not morally right. Any changes should be done through the state system where it is redistributive.

“We are supporting Frank Field&#39s proposals. For the added clarity, we could be prepared to surrender contracting-out contributions.”

Falcon Group chief executive Allan Rosengren says: “I am not convinced that compulsion would help, and there have to be other ways of dealing with the savings shortfall.

“People need to be made aware of where they can save and understand why so that they can make informed decisions.”


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