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NPSS to grab 3.2bn from existing plans

Personal accounts will rip 3.2bn out of existing pension savings, according to the Government’s own estimates.

Despite proposing a raft of measures to protect existing occupational pension provision, the Government estimates in the White Paper that per- sonal accounts will take 8bn in the first year, 60 per cent of which will be new savings.

This means that the new national pension savings scheme is expected to take 3.2bn from existing schemes, as funds in occupational sche- mes are redirected to perso- nal accounts.

This compares with Association of British Insurers’ figures for 2005 showing 12.2bn in new individual single-premium business and 6.5bn in new group business.

The Government proposes an eight-year ban on transfers in and out of personal accounts from 2012 but many employers are expected to close their occupational schemes and auto-enrol employees into personal accounts rather than maintain contributions of at least 3 per cent.

Hargreaves Lansdown head of pensions research Tom McPhail says: “The White Paper is going to be a cause for great concern in the personal finance industry. The Government said it does not want to destabilise existing pension provision but it needs to proceed with extreme caution.”

Scottish Widows head of pensions development Ian Naismith says: “It is particularly important for the pension industry to have the assurance that pension arrangements sold now, for which initial costs will not be fully recovered for several years, will be ring-fenced from early transfer into personal accounts.

“Without this measure, it is likely that few, if any, companies would have been able to participate actively in the company pension market in the run-up to 2012.”


Woolwich launches ‘City Mortgage 2’

The Woolwich is launching a larger loan mortgage product for amounts over £500,000 as it sees bonuses becoming a reality rather than a future hope. Its second phase of the City Mortgage it launched in October with its “buy now offset your bonus when you get it” message will be Woolwich’s lowest ever lifetime tracker […]

NPSS unfair for many, say LibDems

The Liberal Democrats say personal accounts are “fatally flawed” as long as mass means-testing remains part of the benefit system and suggest that for many individuals the scheme will be inappropriate and unfair.

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Have you got pipeline pension term assurance that you are concerned about following the pre-Budget report changes?No “We have pipeline business but we are not concerned about it. We just have to get on and do what we are allowed to do. How can you get rid of something that has only been in for […]

A tough start for 2017 consensus trades

By Kacper Brzezniak Every year, starting around November, investment banks (and fund managers) begin to drip out their outlooks for currencies, rates, economies, you name it, for the following year. The consensus has been largely wrong for the past four or five years; those multiple rate hikes never came, the bond market is still alive […]


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