Norwich Union has admitted it would not agree to a 1 per cent stakeholder cap if it had its time again and accepted its actions strengthened the Government's hand.
Fielding questions from IFAs at Money Marketing Live last week, NU Life chief executive Gary Withers said criticism of the insurer's handling of the price cap issue was fair but should be seen in the context of equity markets at the time.
Withers said strategic decisions on 1 per cent were made in 2000 at a time when nobody was expecting equity prices and savings levels to collapse.
He said the Government would not achieve its target of a reversal of the 60 per cent public, 40 per cent private retirement provision ration without serious dialogue with the private sector, which is currently non-existent.
Compulsion is one potential solution to the problem of low savings ratios but Withers maintained it would require cross-party support to avoid being portrayed as a tax. He called on the Government to increase incentives to save rather than take them away.
Withers said: “I accept we threw the Government a message that made it difficult to turn round and say that we can no longer do this. The observation is a fair one. But that strategy was put together in 2000 at a time when assumptions about equities and savings were quite different.”