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Tory leader blames price cap for lack of advice

Pension providers are losing money on every stakeholder scheme they sell, said Conservative leader Iain Duncan Smith in a hard-hitting speech attacking the Government&#39s flagship pension last week.

Entering the pension fray for the first time, Duncan Smith said savers are not getting the advice they need when they buy a pension, blaming stakeholder&#39s price cap.

He said only 100,000 stakeholder policies have been sold to the target market of 2.5 million people, with another 800,000 policies sold to the wealthy or those with existing pensions. Duncan Smith warned that the country faces a choice between accepting that there is a generation of future pensioners heading for poverty and diverting more public and private resources to funding pensions.

He said: “Many people&#39s expectations of a prosperous retirement are being dashed. Unless something is done about it, millions more pensioners are going to spend their retirement dependent on means-tested benefits.”

Scottish Life head of pensions strategy Steve Bee says: “I think it is about time pensions were treated more seriously at the national level. The Conservatives have indicated at least at the highest level of their party that they are taking pensions seriously.”

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