Shadow Pensions Minister Nigel Waterson has slammed stakeholder pensions as a dismal failure and called on the Government to provide a wrapper that the industry can work with.
Speaking at the B&CE fringe meeting at the Conservative Party conference this week, Waterson said the collapse of the savings culture has contributed significantly to stakeholder's downfall.
He called on the Government to recognise that the price-capped world is not working and to collaborate with employers and the industry to find a better solution.
Waterson pointed to this week's decision by the UK's biggest insurer Norwich Union to launch a pension product that breaks the stakeholder charging structure. Reports suggest Legal & General and Standard Life may follow suit.
He also highlighted the problems faced by financial advisers who are unable to tell if they are misselling pension products because the long-term impact of the pension credit is still unclear.
But he said he was pleased to see new Work and Pensions Secretary Alan Johnson adopt the Conservative Party's policy on automatic enrolment in pension schemes for workers, labelling it a deathbed conversion from the Government.
Waterson said: “The lifetime savings account concept is a way of breathing new life into stakeholder which has failed pretty miserably so far.”
TUC assistant general secretary Kay Carberry said: “One of the reasons stakeholder has not been a roaring success is paltry employer contributions. In many small companies, the scheme is just an empty shell.”