Over three-quarters of advisers believe pension perso-nal accounts will lead to more money being recycled rather than generate new savings.
In a survey of 100 IFAs, Aegon found that eight out of 10 believe personal accounts not will encourage significant new saving while over 90 per cent believe there needs to be a clearer definition of the target market for personal accounts.
Only 21 per cent are optimistic that the introduction of personal accounts will achieve the Government’s aim of getting more people to save more for their retirement.
The results have prompted Aegon to renew calls for the Government to define the target market for personal accounts. Despite several Government proposals in the second Pensions White Paper geared towards preventing levelling down, including an eight-year moratorium on transferring money in and out of personal accounts, there are persistent concerns that personal accounts will stray beyond the stated target market of low to moderate earners who are not saving.
According to the Government’s own estimates, personal accounts will remove 3.2bn from existing schemes when they are implemented in 2012, with 4.8bn expected in new savings.
Aegon says the results of the survey will be shared with the Government.
Head of pensions development Rachel Vahey says: “We hope the Government will take note of this strong concern from advisers who are well placed to assess the potential impact of personal accounts. Advisers clearly believe the introduction of personal accounts will encourage recycling of existing savings and compete with rather than complement existing provision. Therefore, the Government risks failing in its key test of pension reform to boost overall retirement saving.”