View more on these topics

Government figures reveal the personal account losers

The Government’s own figures have revealed that people with less than 20 years until retirement in 2012 on salaries of up to £25,000 will see negligible benefits from personal accounts.

In a written response to Labour MP Baroness Hollis, Lord McKenzie of Luton produced figures showing that individuals in these categories would only see returns of between 1 and 3 per cent greater than if they did not save in the scheme.

The figures are calculated for workers who do not already have private pensions and who would be saving at the default rate.

Hargreaves Lansdown head of pension research Tom McPhail says the figures show those who can afford to save should look at other options.

He says: “They are asking people to save 4 per cent of their income for 10 to 20 years in order to be 1 per cent better off in retirement. I think the Government will struggle to sell that to people.

“Some people will be better off in a savings gateway, some in an Isa, some in a pension and others down at the pub. It will be extremely challenging for the Government and the pension industry to decide which category people belong to.”

A Department for Work and Pensions spokesman says whether another product would be more suitable than a personal account would depend on individual circumstances.

He says: “What we want is for people to save for retirement and that is the main thing that the pension reforms aim to do.”


Take your partners

The FSA clampdown on mortgage miscreants continues apace. None of us should be surprised as we have all seen it coming. The FSA made it clear at the end of last year that mortgage advisers can expect further hefty penalties if they step out of line and have reinforced that pledge over recent days. They have also confirmed that there were further enforcement actions in the pipeline and more investigations under way, with heavier penalties being issued where appropriate as a “credible deterrent for the industry”.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm