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LibDems plan a compulsory &#39stakeholder&#39

The Liberal Democrats&#39 manifesto promises to introduce a compulsory

revised stakeholder as part of a fundamental review of pensions.

The new pension would be called Owned Second Pension Account. People not

in company pension schemes would be compelled to take out one of the new

pensions. The manifesto says: “We believe that the best way for to prevent

poverty among future generations is to ensure that all people have a second

pension.”

The Owned Second Pension Account would also differ from existing

stakeholder schemes as a LibDem Government would make contributions for the

ill, unemployed or carers. Everyone would eventually be compelled to

establish a plan, irrespective of whether they were cap-able or meeting the

premiums themselves or not.

LibDem Social Security spokesman Steve Webb says: “This is basically a

revised form of stakeholder. Obviously, this is a long-term plan and would

be introduced as funds allow.”

Cazalet Financial Consulting analyst Ned Cazalet says: “If you are

compelling those who are not already saving, who are overwhelmingly the

lower-paid, then this is a form of additional taxation. This does not make

sense from a financial planning perspective at all. The life companies will

like it as it will increase the size of the pot.”

Wentworth Rose managing director Philip Rose says: “Compulsion and

stakeholder are going to have to go tog-ether at some time, whatever the

flavour of Government.

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