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‘NPSS must not repeat stakeholder experience’

Standard Life has called for assurance from the Government that the national pension savings scheme will not become a repeat of stakeholder.

Head of pensions policy John Lawson says pension personal accounts will cost around 1bn to run in the first year, factoring in admin costs and subsidising low charges.

He says those in the industry bidding to run the scheme need clear assurances that if they are to invest in the necessary infrastructure, the scheme will not then be scrapped by the Government.

He says: “We cannot have a repeat of what happened with the stakeholder regime where the charging structure meant it would take 10 to15 years for us to make any profit but the Government pulled the plug.

“The Government is talk- ing about personal accounts being financially free-standing but in reality they will be hugely expensive to set up.”

Aegon head of pensions policy Rachel Vahey says: “The Government will have to provide a guarantee, whether it opts for the branded provider model or the centrally-administered model. The firms that take part in the centrally administered schemes will need certainty. They will be in there to make money and will seek compensation if the Government pulls the plug. We need a long-term solution, not one that is changed halfway through.”

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