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Industry and charities slam pensions credit proposals

Labour&#39s pensions credit policy outlined in its manifesto has been attacked as misleading by leading industry figures.

The policy, which is aimed at rewarding the lower-paid for saving for their retirement, has come under fire from life offices, charities and the Inst-itute of Fiscal Studies.

Speaking last week, Tony Blair acknowledged discontent among the elderly who have small pensions or savings and feel they have not been rewarded for their thrift. He said the pensions credit, to be introduced in 2003, would right this wrong.

The proposals have also come under fire from Help the Aged, which says they are too complicated.

The IFS says it does not believe the proposals will have the desired effect of rewarding people for saving.

Scottish Equitable pensions development director Stewart Ritchie has also att-acked the policy, claiming it puts the low-incomed on a par with higher-rate taxpayers.

He says: “The Govern-ment is presenting this as a credit of 60p in the pound. The reality of this is it&#39s taking 40p in the pound and effectively treating holders of small pensions as if they were higher-rate taxpayers.”

Other financial services proposals contained in the Labour manifesto include the previously announced child trust fund and savings gateway, which would encourage those on lower incomes to save for their future, which the IFS says is a move to asset-based welfare.

Labour also pledges to resurrect the Homes Bill, containing the controversial proposals for seller&#39s packs, and commits to implement the recommendations of the Myn-ers Report, including plans for an investigation into retail investments, dubbed “son of Myners” by the industry.

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