Tory Shadow Work and Pensions Secretary Theresa May has hinted in the strongest terms yet that the Conservatives may scrap personal accounts if they win the general election.
Money Marketing recently revealed the Tories are furious about the Government’s decision to delay the imp- lementation of auto-enrolment, with Shadow pensions minister Nigel Waterson claiming it “casts a shadow” over personal accounts.
Speaking at an Association of British Insurers’ conference in London last week, May reiterated the party’s plans for an immediate review if it comes to power, adding that she is becoming “increasingly concerned” about the scheme.
She said: “I want to have a review pretty quickly because I recognise that the clock is ticking. I am becoming increasingly concerned about the impact of personal accounts. When I first came into this job, I started to be concerned and the latest implementation programme has exacerbated that concern.
“The basic question I am asking is whether there is another way of achieving what was wanted. It is something we are trying to look at before the election but we need to have a proper review when we come into Government.
“It may be that personal accounts are the right way forward. There was a consensus at the time, so maybe the review will come up and say right this is the only way that makes sense but I have my concerns about the impact it will have on pension savings overall.”
May is worried that the scheme could result in more people saving into a pension but lower pension savings as a whole. She said: “The prize must be more people saving and increased savings as a whole. That is the fundamental question, are personal accounts going to achieve the latter or the former?”
She voiced concerns about a potential future misselling scandal. She said: “I also have a longer-term concern of the potential impact of people saving into this mechanism realising down the road they have not saved for the comfortable retirement they thought they were being told they were saving for turning round and accusing the Government of the day of misselling.
“It is not usual for Governments of today to think about the impact on Governments of the future but I think it is important.”