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L&G lobbying for’soft compulsion’ pension solution

Legal & General is lobbying the Pension Commission to impose what it calls a “soft compulsion” solution to the pension crisis after analysing take-up of its company stakeholder scheme.

The firm is calling for legislation that requires an employer to match any contribution made to a pension plan by an employer up to a maximum level – initially set at 3 per cent of pay.

Director of pensions strategy Adrian Boulding says: “Soft compulsion is the best of both worlds’ solution. It forces the hand of reluctant employers unwilling to bear the pensions burden and gives emp- loyees the flexibility to decide when to save.”

Legal & General’s internal research shows take-up of its matching contribution pension is lowest among staff under 30 (71 per cent) and above 60 (69 per cent) compared with a 76 per cent average across all ages.

Hargreaves Lansdown head of pensions research Tom McPhail agrees that matching pension payments is one of the best ways to encourage take-up but he point out: “This is the same Legal & General that persuaded Gov-ernment a 1 per cent stakeholder pension was a good idea. It has one or two skeletons in its closet, so I would question what its agenda is.”

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