The Liberal Democrats' 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
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.