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LibDem conference: Auto-enrolment risk warnings must be deployed

Altmann

Saga director general Ros Altmann says more must be done to warn certain people they may be better off not saving into a pension.

Speaking at a fringe event at the Liberal Democrat conference in Birmingham, she said other savings vehicles may be more appropriate for some sections of society.

She said: “I am worried about people in their 50s, low paid, maybe renters, who will actually be the first group of people to retire under this auto-enrolment system, who will have paid a 1.8 per cent upfront charge and who may find their pensions savings have delivered them very little.

“We need to make sure we have proper risk warnings in place. I do not see enough talk about who is going to warn those people who should not actually put money into a pension scheme because it is not suitable for them. We are kind of relying on them knowing it themselves and I am not sure that is the best way forward.”

To attract younger people into long term saving,she says pensions must not be seen as a “locked box”.
 
She said: “Maybe it will have to be in the 2017 review, I would prefer it to be earlier, but is it possible for Government to consider creating a vehicle which we do not call a pension because that is not a very popular word, but where the 4 per cent from the employer and tax relief is locked in but you can have access to the 4 cent you put in?”

British Chambers of Commerce director of policy Adam Marshall says: “The hope would be young people would not touch their 4 per cent, but it seems the practice and culture among many young people makes that unlikely.”

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. Is this the same Ros Altmann who has compained for years for compulsory pension contribution? Also, the point of compulsory pensions is to reduce the reliance on the State.

  2. Advice required ….. whoops

  3. Time to deal with the thorny ISA V Pension issue once and for all. Who should use which route. More fog on this issue is NOT required. It is a ‘missellers licence’ to print money. We are in danger of setting ourselves up for the next missellng scandal.

  4. Nanny Altmann starts to chew at a simple idea, Liberals will join in because it tells the electorate they believe in fairness and then a pigs ear will ensue.

    Not sure where the advice will come from – Money Advice Service? or is that the National Advice Service – the NAS – a new British Institution – free at the point of delivery – quality controlled by the FSA.

    May be worth putting a CV in – bound to have a great pension scheme, salary and benefits package.

  5. Unless I have got this altogether wrong I was under the impression that you cpould not advise someone not to take part in Nest. Which I think is what she is talking about.

    Many employers if they read this will be delighted I am sure.

  6. Surely Ros Altmann is missing the point?

    The problem lies with our overly complex benefits and means-testing system, which actually makes some people worse off as a result of attempting to save.

    The system should be changed, such that if you do nothing you end up worse off than someone who has tried to help themselves and tried not to be a burden.

    There are too many who take the view “live for today and someone else will pick up the tab” in society today.

    Reform the system and that way, there would no mis-selling – as everyone who has saved, even a little, should be better off as a result.

    Years ago I met a lovely lady who had been widowed and found a new man (who wasn’t lovely in any sense of the word). Her first husband had tried to provide for her and set up a pension plan for her. He had not contributed for many years before he died, but she had around £20k in her pot.

    This was in the days before Triviality and she wanted me to set up an annuity for her.

    “New man” was asked if he would like to be included as a 2nd life and his response to me was “No chance – the sooner she dies the better – the one grand a year she’s gunna get means we lose out on nearly three grand of benefits”

    Needless to say, that was my only visit, but what a system we have!

    Reform the benefits otherwise it will be low paid workers currently in their 30’s who need advice not to join NEST, never mind the over 50’s

  7. Who does Ros Altmann think she is. She may have spent years working for a company and be some sort of Guru on pensions but she doesn’t deal with clients.

    Give clients access to their pension funds early (even if it is their own contributions) and they will be left with nothing in retirement.

    Pension is for pension and retirement/semi retirement not to spend on the first whim that comes along.

    Proper financial advice is required so that people have some emergency savings behind them. They all seem to be able to afford the latest ‘I Phone’ but they can’t afford to put away a few quid for retirement or an emergency.

    Spend a couple of weeks with an advisor who works in this field and then she may understand.

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