The Government is pinning its hopes on Sandler-style pensions distributed through high-street banks and State-sponsored telephone and internet advice services to increase pension provision among low and middle earners.
But IFAs and providers have slammed the proposals saying pensions will not be sold as long as there is a rigid commission cap on Sandler's suite of products, which are likely to subsume stakeholder pensions.
The Government hopes people will be more likely to take out pensions once they receive statutory money purchase illustrations, which come in next April.
The DWP is also proposing establishing public access to advice through a revamped tree-walking website and telephone advice centre.
It also proposes to oblige employers who do not offer pensions to give free financial advice.
Pensions minister Andrew Smith told Parliament this week: “To broaden access to advice we will work with the financial services industry to develop mass-market financial advice in high street banks and will consult on options for a possible requirement on employers who do not provide pensions to provide financial advice free of charge through the workplace.”
Scottish Equitable pensions development director Stewart Ritchie says: “The 1 per cent charge cap is the real issue – there is nothing in the speech about making it easier to distribute pensions. It is obvious that one of the prime reasons for the poor take-up of stakeholder is there is no margin for advice.”
Informed Choice managing director Nick Bamford says: “I am not impressed with the idea of the Government getting involved in giving advice through a website.”