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Pickering says public will realise Isas beat pensions

Alan Pickering, the author of the Pickering review on pension simplification, has accused pensions minister Malcolm Wicks of living in cloud cuckoo land if he thinks consumer education is going to solve the pension crisis.

Speaking exclusively to Money Marketing last week, Pickering attacked Government pension policy, claiming educated consumers would realise they are better off saving in an Isa rather than a pension.

He says that soon as consumers&#39 understanding of the UK personal finance regime is improved, they will realise that pensions are a poor value choice except for staff getting an employer&#39s contribution.

Pickering believes that the disincentive of means-tested benefits and the inflexibility of tying up money until retirement and then buying an annuity means that most people would be better off out of pensions.

Echoing similar comments made last month by FSA outgoing chairman Sir Howard Davies, Pickering says the FSA has an almost impossible task of creating a lighter-touch sales regime that will not lead to consumer misbuying.

Pickering says: “Wicks is living in cloud cuckoo land if he thinks a better informed consumer is going to solve all our problems. As soon as consumers are well informed, they will realise they are better off in Isas. The FSA&#39s job of creating a lighter-touch regulatory regime that avoids consumer detriment is a thankless task that is potentially undeliverable.”

The Department for Work and Pensions was unavailable for comment.

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