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Shadow pensions minister rejects Australian-style compulsory contributions

Shadow pensions minister Nigel Waterson has rejected the idea of Australian-style compulsory pension contributions if the Conservatives get into power.

Speaking at a debate on pension provision hosted by Pointon York Group today, Waterson denied the Tories were sitting on the fence over whether or not they would retain personal pensions if get into power at the next election. He said the party was just investigating whether personal accounts are going to work.

Pointon York Group’s chairman, Geoffrey Pointon, asked Waterson whether the Conservatives believed in soft compulsion in order to encourage more pensions saving.

Waterson said: “We certainly don’t believe in compulsion on the Australian model. Firstly, its not very Conservative to tell people what to do with their money, and secondly, we don’t want to end up getting sued by people who have been told to do something that turns out not to be in their interest.”

Waterson conceded auto-enrolment might be the solution.

He added: “Studies show the vast majority of people in this country don’t know anything about pensions and don’t want to know anything. There is a massive job of financial eduction to be done but its going to be done.”

Waterson said: “We have got to find out about the nitty gritty, because nothing on this scale has ever been tried before.”

He said one of the areas which needed further investigation was means-testing.

Waterson said: “In the most pessimistic scenario, we might end up with smaller pensions savings overall once personal accounts have been introduced, which is an apalling prospect. We don’t want to inherit a turkey.”

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