Savers are not getting the advice they need when they buy a pension and life offices are losing money on every stakeholder pension they sell said Conservative leader Iain Duncan Smith in a speech today.
Entering the pensions fray for the first time, Duncan Smith said only 100,000 stakeholder policies have been sold to the target market of 2.5m people while the rest of the 800,000 policies sold have been bought by either the wealthy or those with existing pensions provision.
He said the country faces a choice between accepting the fact that a generation of future pensioners are heading for poverty in retirement or diverting more public and private resources to funding pensions.
Duncan Smith said: “This is one of the biggest social and economic changes in Britain today. Many people's expectations of a prosperous retirement are being dashed. Unless something is done about it, millions more pensioners are going to spend their retirement dependent on means-tested benefits. That is not what they want and it is not what we want.”