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Replacement demanded for &#39failed&#39 stakeholder

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&#39s 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&#39s decision by the UK&#39s 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&#39s 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.”


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