View more on these topics

Lilley calling for compulsory opting-out from S2P

Forcing workers to opt out of the state second pension and compelling them to save is the only way to increase retirement saving, says former Tory Social Security Secretary Peter Lilley MP.

In a presentation to the conference in London last week, Lilley told delegates the 1 per cent charge cap has removed the incentive for life companies to distribute retirement products.

Lilley argued that if employees are forced to switch their state second pension contributions into employee-based or personal schemes, the fact that they have a plan of their own means they will be more inclined to make additional payments.

He would like to see all employees, or at least new entrants to the labour market, opt out of S2P and pay an equivalent sum into either an occupational or personal pension. But Lilley rules out compulsory payments above those paid into S2P.

Lilley told Money Marketing: “Persuading people to take out a pension policy is costly. By setting a 1 per cent cap on charges, the Government has removed the reward for persuasion without replacing it by compulsion. I favour requiring everyone to opt out of the unfunded state second pension and be compelled to save an equivalent sum in their own pension. Once people had their own pension, it would be easier for the savings industry to get people to pay more into their own schemes.”

Recommended

Price of independence

Offering financial advice was not an obvious career choice for Fiona Price who claims on graduating from university she was still relatively non-numerate and “scared” of figures despite a degree in psychology and an MBA.She was forced to overcome her fear of statistics when she “fell into the financial sector” but says she only ended […]

Buoyant mood in market

In Future Mortgages&#39 quarterly survey of 500 top mortgage brokers, we were delighted to record a high level of confidence among intermediaries. Mortgage business is increasing, with 76 per cent reporting a rise over the past three months and only 7 per cent experiencing a fall.Although the number who have seen a rise in business […]

Mortgage Next launches new Bristol & West funded product

Network Mortgage Next has launched a new mortgage funded by Bristol & West with a two year, two per cent discount off the lender&#39s standard variable rate. This gives a current rate of 3.95 per cent. It pays a procuration fee of 0.3 per cent with a minimum fee of £300 and is available on […]

Matrix offers VCT to beat competition

Matrix Money Management is aiming to get ahead of its competitors by introducing a venture capital trust (VCT) that aims to produce a growing income for investors.The cornerstone VCT will be managed on Matrix&#39s behalf by GLE Development Capital, a venture capital company which has been managing VCTs since 1994. It will initially invest in […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment