The Tories say they will not vote for pension personal accounts unless the issues of means-testing and ensuring light-touch regulation are dealt with.
In an interview with the Financial Times this week, Shadow Work and Pensions Secretary Chris Grayling says the Government must counter the damage that means-testing could do to the scheme.
He says: “The reality is that unless the Government structures personal accounts in a way that eliminates the problem, there will be some people who save for retirement in the accounts who will not derive any benefit or only a marginal benefit from doing so.”
He says if large numbers of people opt out of personal accounts due to media attention on the means test “it will limp to the end of the runway in the same way that stakeholder pensions did and not take off and we will be back to where we started seven or eight years ago”.
A bill to introduce personal accounts was announced in the Queen’s Speech this week.
In an interview with Money Marketing at the Conservative conference in Blackpool, Grayling said a Conservative Government would be forced to make drastic changes to personal accounts due to the means test and it was up to the Government to propose a solution.