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Duncan Smith quells flat-rate delay fears

Work and Pensions Secretary Iain Duncan Smith has dismissed fears that advisers could be at risk of misselling if the flat-rate pension is not in place by the time pension auto-enrolment gets under way.

In March, Work and Pensions select committee chair Anne Begg told Money Marketing the Government must clarify what the rate will be by the time autoenrolment starts in October 2012, or IFAs will find it difficult to advise people on Nest and other pensions.

The DWP is looking at responses to a consultation on the flat-rate pension, with a response expected this month.

Speaking to Money Marketing at the Conservative conference last week, Duncan Smith said Labour MP Begg’s fears are unfounded.

He said: “I do not agree with Anne’s assessment. We have to make sure that auto-enrolment works with or without the single-tier pension.

If we manage to get that working it will make matters massively better, encourage saving in an enormous way and help women dramatically.”

Under auto-enrolment, the minimum contribution levels will be 8 per cent, with 4 per cent from the employee, 3 per cent from the employer and 1 per cent from the state.

Duncan Smith said the reforms must be allowed to bed in before deciding whether to raise the contribution level.

He said: “We want to get it launched so it is viable, companies work with it and we set up a base. In due course, we will look at everything and see if changes need to be made.”

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