View more on these topics

Labour ramps up pressure on Webb over small pot reforms

Gregg McClymont 480

Labour Shadow pensions minister Gregg McClymont has warned the Government’s proposed ‘pot follows member’ reforms are “deeply flawed” and will leave savers exposed to high costs and charges.

In July, pensions minister Steve Webb confirmed plans to introduce a new system where automatic enrolment pension pots would move with employees automatically when they change jobs to minimise the number of small, dormant accounts.

Yesterday, National Association of Pensions Funds chief executive Joanne Segars , Age UK director general Michelle Mitchell, Which? Chief executive Peter Vicary-Smith and TUC general secretary Brendan Barber wrote to Webb to voice their concerns about the proposals.

They said a saver could lose 25 per cent of the value of their fund if they are automatically transferred from schemes with low charges to schemes with high charges.

PricewaterhouseCoopers has since issued a statement arguing that an “aggregator model” – where peoples’ old pots would automatically transfer to a central scheme such as Nest – would be more attractive for employees, employers and providers than pot follows member.

McClymont (pictured) says: “The Government’s proposal is deeply flawed as a whole range of pensions industry opinion now agrees. Yet Steve Webb seems intent on carrying on regardless.

“His dismissive attitude is very worrying. The loser will be the pension saver who sees his money disappear in costs and charges.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. You can’t take Labour seriously.

    They are the one’s who thought up this calamity and once again they leave someone else to sort out their mess!

  2. Please provide the research demonstrating the high cost of moving from one scheme to another?

  3. This is a very ill thought out attempt to grab headlines by Labour. This argument is completely pointless. Yes, I could move from a 50bps fund to a 100bps fund under “pot follows member” but likewise I could go the other way and be better off.

    To be blunt – utter toss from Labour.

  4. Steve Webb isn’t exactly the first person who comes to mind when I think of pensions expert or innovative thinker (maybe well intentioned daydreamer). However, this latest drivel from McClymont demonstrates that Labour are even further behind the curve on pensions – you would have thought that with the number of Pensions Ministers under Tony Blair, one of them may have grasped something. I suspect it was more to do with the seriousness they did, or did not, attach to the subject.
    To be fair Webb has been left with this little baby to sort, why not have some common sense and cross party cooperation? Pig’s might fly……
    For goodness sake be done with it and just stick a phased 8% on NI and have a funded Govt scheme – admin would be interesting though!

Leave a comment

Close

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

Email: customerservices@moneymarketing.com