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Mig review too late for the start of stakeholder

The pension industry believes the Government has woken up to the threat of a pension misbuying scandal but warned it may be too late for the first stakeholder clients.


The Chancellor announced a review of the minimum income guarantee in Tuesday&#39s Budget.


The pension industry had feared that, under current rules, saving into a stakeholder would become a &#34voluntary tax&#34 as any savings would be means-tested and reduce state benefit entitlement.


Despite welcoming the move, experts believe it may have come too late for many


people buying a stakeholder pension from next April. They want the consultation process started as a matter of urgency.


The Chancellor says the move is designed to stop pensioners being penalised for


saving for retirement.


Brown said the Department of Social Security will launch


a consultation into the introduction of a new &#34pensioners&#39


credit&#34 after the next election.


He said: &#34This is designed not only to lift the poorest out of poverty but also to do more for those with modest occupational pensions and savings who should not be penalised for having worked hard all their lives and saved for retirement.&#34


Currently, anyone with a basic state pension loses additional income on a £1 for £1 basis up to the Mig level.


Scottish Equitable pensions development manager Steven Cameron says: &#34The Government has acknowledged the threat of a huge misbuying scandal over stakeholder. But it must act in time for stakeholder so we as an industry can put our hands on our hearts and say to people taking out a stakeholder you will gain by planning for your retirement.&#34


Liberal Democrat social security spokesman Steve Webb says: &#34It is incredible we have to wait years before any action is taken.&#34

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