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Standard Life scorns &#39stake success&#39

Standard Life has poured scorn on Government claims that stakeholder pensions have been a success.

At the Saver Summit, Baroness Hollis described the sale of over a million stakeholder pensions as a success.

But Standard managing director, marketing Simon Douglas pointed out that while 42 per cent of stakeholder policies sold have gone to the Government&#39s £10,000-£20,000 target market, this only represents 2 per cent of the 13.2 million Britons without a pension.

Hollis said: “Over one million stakeholder pensions have now been sold. This must be a success story in anyone&#39s book. We have met our initial objectives to respond to existing pensioner poverty and to help those at risk of pensioner poverty in the future to build entitlement and protection.”

Douglas said: “It is not right to say stakeholder has been a rip-roaring success when those sold in the Government&#39s target market represent only 2 per cent of those without a pension.”

L&G berates Hollis over pension credit

Legal & General has criticised Parliamentary under-secretary of state Baroness Hollis over the pension credit, saying it acts as a barrier to entrants to the pension market.

At the ABI Saver Summit in London last week, Hollis said the means-tested benefit would reward low-income pensioners with 60p for every pound of income they had above the basic state pension.

But L&G organisation dir-ector, corporate and strategic partnerships Tony Filbin said: “The pension credit helps people who already have some retirement savings but, for getting new people to save, it still leaves a massive problem. Baroness Hollis should try sitting in front of workers in the workplace and persuade people that it is worth saving a pound when they will lose 40p from it. She will find it difficult.”

He accepted that the pension credit, which comes into force from October 2003, improved the situation for existing pensioners who lose 100 per cent of their pensions up to the minimum income guarantee under existing regulations but said it did nothing to attract new money into pension products.

Hollis said: “Commentators say because the minimum income guarantee is at a decent level, it is not worth saving because you will not float free of benefit. The ground-breaking pension credit means that for the first time we will reward, not penalise, modest savings. Far from discouraging small savings, the pension credit will underpin it.”

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