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Personal account hybrids slammed

The DWP has floated the idea of the private sector developing hybrid top-up policies to run alongside personal accounts.

Speaking at a Social Market Foundation event in London last week, DWP chief economist Robert Laslett responded to concerns that low personal account contributions will become the norm by sugges-ting the private sector could construct savings vehicles in partnership with the scheme for people who want to save above the contribution cap.

But the ABI says such a measure would risk undermining both existing private sector provision and plans for pers-onal accounts by blurring distinctions between the two.

Conservative Shadow Pensions Minister Nigel Waterson had warned Laslett that the level of contributions for personal accounts will not deliver a comfortable retirement for many and there could be problems if the public are told that further saving is not needed.

Laslett said: “Are we going to see hybrids built around personal accounts, with the private sector providing the top-up?”

ABI spokesman Jon French says: “No provisions for such a policy have appeared in Government documents. Any blurring of the line between existing private provision and personal accounts risks undermining both markets.”

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