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ScotEq and Widows fear IPAs will add complexity

Pension providers want the Government to put individual pension accounts on hold after the launch of stakeholder to prevent consumer confusion.

The IPA is due to start alongside stakeholder In April next year and is intended to fit with stakeholder and other pension contracts.

In its submission to the Government consultation, Scottish Equitable has voiced fears that establishing two new pension schemes simultaneously will only confuse the public. ScotEq believes the April 2001 deadline for IPAs is unlikely to be met, given the amount of detail which needs to be finalised.

It also expresses concern on whether the accounts will be viable within the 1 per cent cap for stakeholder savers, arguing that, unless the stake-holder provider and the IPA manager are part of the same provider, IPAs will introduce additional costs.

Scottish Widows says it welcomes the Treasury&#39s aim of increasing the transpar-ency, flexibility and portability of pension arrangements but it has some serious concerns about the real benefits to consumers offered by IPAs.

Scottish Equitable pensions development director Steven Cameron says: “Launching stake- holder and IPAs at the same time risks confusing consumers.”

Scottish Widows senior technical support manager Ian Naismith says: “IPAs add a new layer of complexity to pension provision. We are concerned that, in its current form, it will not significantly help with the key issue that must be addressed of how we can encourage more people to make adequate pension provision for their retirement.”

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