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Fidelity reveals alternative NPSS Personal Account model

Fidelity has unveiled its alternative model for NPSS Personal Accounts, which will enable savers to opt out of the basic scheme to access wider investment choices.

The “Open Personal Account” model is designed to sit somewhere between the models proposed by the Department for Work and Pensions and the ABI.

It will require all people, unless they are already members of a high quality occupational scheme, to be enrolled automatically into one of two retirement savings schemes.

The majority of savers will be expected to opt for a Personal Account, similar to that set out by the DWP. This is the low-cost, default option with a limited range of funds.

Savers who want a wider choice can opt for the open market option, a range of approved branded providers offering products that might resemble stakeholder plans. Additional costs will fall exclusively on those who take this option.

A centralised collection agency will act as an intermediary between employers and the two forms of saving.

Fidelity International president, European Institutional and Retirement Businesses Simon Fraser says: “The key to a successful NPSS is to ensure the default investment fund is a good one since this is the route most people will choose to take. However, the default NPSS option may not be appropriate for an individual’s entire career. We need to offer them a bridge to a wider range of investments.”

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