The Government must clarify the costs of any national system of generic advice that would underpin personal accounts, according to the work and pensions committee.
In its report on personal accounts, published last week, the committee said the Government needed to set out estimates for the costs of the service both in absolute terms and as a percentage of funds held in personal accounts.
The committee said it looks forward to the results of the Thoresen review – due by the end of the year – but, given the central importance of the issue, such a scheme should have been tested or established before personal account proposals were launched.
It said if either the costs or quality targets cannot be achieved, it “will seriously undermine financial performance and public trust in the per-sonal accounts agenda”.
The report calls on the Government to clarify whether it is considering some form of statutory waiver from misselling claims for personal accounts and, if so, how it would operate.
MPs are concerned about a lack of clarity around charges for advice, collection and the third tier in the current proposals and want the Government to be more open about modelling and cost estimates.
With regards to means-testing, the committee said it would await the work of the Pensions Policy Institute into the effects of increasing the trivial commutation and pension credit capital limits and called on the Government to publish a detailed response once the work is finished.