Re-branding Personal Accounts as NESTs will do nothing to make the proposed pension scheme any better, independent policy adviser Dr Ros Altmann has claimed.
According to Dr Altmann, policymakers are ignoring the risks of NESTs, and the pension project should be halted before any more money is 'wasted'.
NESTs, which used to be called Personal Accounts, and aim to help lower earners make adequate pension contributions in the workplace, offer short term benefits, she claims.
"Changing the name of 'personal accounts' to NESTs will not make them work any better. Indeed, by ploughing ahead with this project, regardless of the risks to the lower and middle earners they are aimed at, the Government is continuing to ignore the dangers of forcing workers into a pension arrangement that may not be suitable for them."
The auto-enrolment feature of NESTs could also be putting people in a vulnerable position, Dr Altmann claims: "The risks will be borne by workers who are automatically enrolled into a NEST without realising they should not be.
"These people could discover, but not for many years, that their NEST merely replaced the means tested state benefits they would otherwise have received."
According to Altmann, a superior alternative to NESTs would be a: "Proper radical overhaul of the state pension system, to provide a basic, non means-tested resident's pension.
"Once we have made it safe for people to save, it should be up to them to negotiate whatever help they can get from their employer to help fund long-term savings for their future."
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