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Pensions still face perils

With a White Paper on pensions to be issued this week, the Government is probably congratulating itself.

It could well feel there has been a tidy resolution to all the debate about Adair Turner’s report, with Blair and Brown striking a deal and a blueprint for reform established.

But several questions remain. Will means-testing really be phased out? Could the Government be doing something better with the time and resources which might shore up the existing arrangements or at least postpone the decline of company pensions? Will Turner increase the level of pension savings or will savings actually fall?

Will heavy handed or misplaced regulation of the advised market shut down pension savings in the meantime?

Standard Life warns that changes to contracting out could bring a 14bn savings drop. Axa says many employers will cut their contributions to a Turner minimum. Scottish Life’s Steve Bee has warned of a pension saving nuclear winter in the run-up to Turner if the Government gets it wrong.

What if they are correct? We thought amid all the back-slapping about any skilfully written White Paper, someone had better ask.


MPs want the ABI to prove how its alternative scheme would cut costs

The Treasury select committee has challenged the ABI to prove how its version of the NPSS would drive down costs rather than create more red tape. The committee’s report on NPSS regulation says simplicity and near-universal suitability are the overriding factors in deciding who should run the scheme. It says the ABI’s introduction of consumer […]

Lambeth/Portman merger confirmed

Lambeth Building Society has approved its merger with Portman Building Society. The effective date for the merger is expected to be September 30, 2006. Lambeth chief executive Chris Radford says: “The Lambeth is a strong business that offers excellent products and service to its members and this merger means they can look forward to continued […]

Manipulating pension sales

I agree wholeheartedly with Ned Cazalet’s claim that life companies are manipulating their new business reporting. The aim is, of course, to produce figures that they can trumpet to the industry as an indication of how big and strong and successful they are in the hope that this will engender confidence in the marketplace and […]

CI is irrelevant to today’s conditions, says Cowman

Critical-illness cover is stuck in the past and innovation is needed to ensure products are relevant to consumers, says Prudential head of protection Paul Cowman. He says medical advances have brought the need to revamp the product as definitions drawn up 20 years ago no longer relate to today. Pru is introducing a product at […]


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