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Willetts says ABI urged him to back stakeholder

Shadow Work and Pensions Secretary David Willetts has revealed that he only suppor-ted the idea of stakeholder pensions after the ABI urged him not to oppose it.

Speaking on achieving consensus in pensions at the ABI annual conference in London last week, Willetts said he only backed the plan so the policy could move forward.

The ABI has been increasingly critical about various aspects of stakeholder and lobbied against the original 1 per cent charge. IFAs have been critical of the product as it allows scant margin for the distribution of pensions.

ABI spokesman Jonathan French says the charge cap for stakeholder is too low, with price capping at 1.5 per cent for the first 10 years. The ABI wants to see a further increase in the price cap although it does not have a particular figure in mind.

Willetts said: “The ABI urged me not to oppose stakeholder pensions. There will inevitably be policy disputes as we have to question and challenge Government policy but a consensus is desirable.”

French says: “We do not oppose stakeholder on principle and still see them as part of the overall picture. It is still too early to tell whether they will be a success.”

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