More detail needed on pensions, say commentators

17 November 2006
Stakeholders have tentatively welcomed the provisions of the coming year's pensions bill, announced in the Queen's Speech.

Richard Saunders, chief executive of the Investment Management Association, warmly welcomed the introduction of a delivery authority to oversee the NPSS scheme, which he said would "significantly" boost savings.

"Getting the detail right" with the delivery authority was critical, he added.

Chris Kenny, director of life and pensions at the Association of British Insurers, agreed that "much more work [was] needed to get the fine detail right" on NPSS.

He also called for the elimination of means-testing, which, according to insurance and pensions firm Aegon's head of business regulation, Steven Cameron, will still affect one in three people under the new legislation.

Mr Cameron said the reform did not go far enough towards ending means-testing altogether.

Pensions provider Fidelity International, meanwhile, voiced a substantial critique, warning customers that the link of pensions to earnings would only begin in 2012, and the retirement age would only rise gradually, leaving the typical household looking at a 50 per cent fall in income at retirement.

Slow implementation meant customers needed to "start saving more now", the company warned.

Independent Pension Advice

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