Lib Dems criticise personal accounts scheme

09 November 2007
Means testing is counter-productive to the government's aims of getting people to save for their retirement, a politician says.

Liberal Democrat work and pensions spokesperson Danny Alexander claims that the government "obsession" with means testing deters people with low and middle incomes from saving for their future.

Attempts to kick-start retirement savings with incentives are a pointless gesture, he suggested.

"Many people […] will think twice about setting aside money for old age when Labour's massive increases in means-testing means they would simply be saving money for the government," he explained.

His comments came after the new proposals for a pensions bill were announced during the Queen's Speech, in which the government indicated its aim to promote personal savings accounts as an option for pension investment.

This news of the bill was welcomed by the National Association of Pension Funds, who said it was "vital".

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