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Tories told to offer opt-out guarantee

A group of pension experts and politicians vetting Tory pension proposals has recommended that the party offers young people a guarantee if they opt out of the state pension.

The group, coordinated by right-wing thinktank the Centre for Policy Studies, says young people should be given a guarantee that their investment will not fall below state benefits if they opt out and invest in a private scheme.

The Tories propose that the National Insurance contributions of people who opt out will be invested in an approved pension plan.

This would either involve a number of pension providers or the creation of a common fund.

Some IFAs say the approach could mean they have a limited role. But the Tories believe IFAs have a key role to play in developing relationships with potential consumers who do not currently save.

Steering group member Joanne Hindle says: “We know that the Tories proposed privatising the state pension in the past and one of the major concerns then was the lack of a guarantee.”

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