Pension experts have hit out at the plans to set the pension protection levy at £300m a year, arguing that it will be insufficient to protect workers and will create a shortfall.
Speaking at a Royal London fringe event at the Labour Party conference, pensions minister Malcolm Wicks said the levy would be set at a cost of £20 per pension scheme member but product providers says Wicks' estimate is unrealistic.
For those who are at a scheme's normal retirement age, the fund would cover 100 per cent of their pension up to a set limit if their scheme goes bust, with those below pension able age getting 90 per cent.
Scottish Life group head of communications Alasdair Buchanan said: “I think the industry will be astonished. It looks like a fudge to try to get rid of pressure on the Government on pensions ahead of the election.”
Standard Life managing director marketing Simon Douglas said: “If anyone believes that £20 can be adequate, they are a better man than me.”
Wicks said: “This is rather less cost than insuring a two-week holiday. To suggest that £20 per member is not poss-ible is saloon bar nonsense.”