A Conservative Government would allow younger workers to opt out of
National Insurance to fund pensions privately.
In the manifesto, Time for Common Sense, the Tories also promise to end
compulsory annuity purchase at 75.
The pension proposals would allow people under 30 to rebate their NI
contributions into a personal pension or stakeholder.
The manifesto also contains several policies of direct relevance to the
financial services industry, including a pledge to abolish tax on savings
and dividends for low and middle-earners.
The pledge to abolish compulsory annuity purchase promises to raise the
temperature of the annuity debate.
Retirement Income Reform campaigner Oonagh MacDonald has attacked the
Government's resistance to annuity reform. She said: “The Treasury has
raised all sorts of phantom objections to our proposed reforms,
particularly in the area of taxation.”
Tory DSS spokeswoman Jacqui Lait says: “Our proposals mean that under-30s
could, if they want, contract out of National Insurance and put between
£500 and £1,500 into their own pension provision. It needs to be
an approved pension scheme and could be stakeholder if they think it is a
good deal. They might also choose to see an IFA.”
Torquil Clark pensions development manager Tom McPhail says: “The only
people who have not kept up with the argument on annuity reform are the
“Reform is long overdue. The Conservative pension proposal is an
Pension funding is something where individual ownership and responsibility
can only result in greater awareness of the issues involved. It might also
be something in which IFAs will be involved.”