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Darling reveals plan for price-cap pension family

The Department for Work and Pensions is planning a new range of price-capped regula-ted pension products which can be sold direct without advice.

Speaking to Money Marketing at the NAPF Conference in Brighton last week, Work and Pensions Secretary Alistair Darling said the new products would be price-capped as the 1 per cent cap on stakeholder was one of its prime selling features.

Darling says he has a vision of creating a “family of products” with “a minimum of safeguards” and “simple health warnings” that can be sold direct on the internet or phone.

He believes people want to buy pensions but are put off by the complicated selling process. The Government wants to make pension products as simple and as popular as Isas.

Darling said: “The majority of people know they ought to make pension provision but have to go through huge hoops and hurdles before they get there. We regulated products and regulated sales processes. We don&#39t need both.”

But experts are questioning why the Government has not learned the stakeholder lesson that low charges alone will not stimulate people to buy or save.

At the conference, head of DWP pensions simplification review Alan Pickering said he wanted to reduce the number of pension contracts available.

The ABI, which has warned the Government to keep out of product regulation, said it would have to look at Darling&#39s proposals very carefully.

Details of the products will be announced in the autumn after Pickering, the Inland Revenue and the Sandler review have set out their proposals.

Standard Life pensions technical manager John Lawson says: “The Government has got to recognise that people do not go out and buy pensions and that direct business is not necessarily chea-per than using IFAs.”

Norwich Union director of pensions development Jerry Barnfield says: “People need advice and they need a stimulus. We have heard all this before when stakeholder was introduced but most sales have been through IFAs. Having simple price-capped products without access to advice and an incentive is not enough.”

•NAPF, p8; Comment, p31; Pickering, p72


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