National pensions savings scheme

ePolitix Stakeholders give their views on the national pensions saving scheme.

 

Stakeholder Response: Which?

 

 

Mick McAteer, Which? principal policy adviser, said: "Which? believes in a Turner-style NPSS with low level charges. As detailed in our submission to the Pension Commission and the minister Stephen Timms, we have taken Turner one step further.

 

"We believe in an independently-run NPSS with a strong governance structure. Which? believes the IMA model comes closest to the reforms that are needed to create a sustainable, affordable pension system for consumers.

 

"Our recent market research assessed the perception of a Turner style model and a financial services retail market model. Our market research has shown consumers have given their verdict. It demonstrates an inherent lack of public trust in the financial services industry but significant support for an independently-run national pension savings scheme.  

 

"Consumers have said trust is critical to sustainability. Only one in nine people, that is 11 per cent, would trust the financial services industry, for example an insurance  company, to look after their pension.  

 

"Two in five, that is 40 per cent, would have most trust in an independent body or organisation and one in five, that is 20 per cent, would have most trust in the government.

 

"Our research also showed that two thirds of people questioned thought it was very important for the money invested in their pension to be safeguarded and more than six in 10, or 62 per cent think it is very important to have a good idea how much their pension will pay out when they retire."

 

 

Stakeholder Response: Age Concern

 

 

Neil Churchill, Age Concern's communications director, said: "We agree with Lord Turner’s assertion that a radically different approach to pension saving is needed and believe that the NPSS is part of the overall solution.

 

"Stakeholder pension schemes just aren’t working in the way they were designed to. They have failed to extend pension coverage, increase savings or give people on low or modest incomes a fair deal.

 

"It is appalling that these schemes eat away as much as 30 per cent of people’s pension savings in fees and charges - an alternative is needed which makes pension saving worthwhile and gives workers the best deal possible.

 

"Lord Turner’s Pension Commission proposals stand or fall as a package. We believe the NPSS is a vital component of the reform package which will provide people with a new private saving option better than any of the alternatives currently available to them.

 

"One of its most redeeming features is its portability which will ensure that millions of casual workers in particular have the option to continue saving throughout their working life.

 

"Given the foundation of a higher state pension, the NPSS is by far the best option for ordinary working people, particularly low-paid women, who do not get any pension from their employer.

 

"If introduced, it could give millions of people the advantages currently only enjoyed by workers lucky enough to have access to large occupational pension schemes."

 

 

Stakeholder Response: Investment Management Association

 

 

A spokesman said: "If properly implemented, with an appropriate governance structure to safeguard the interests of members, the Pensions Commission’s model for an NPSS will enable people on low incomes, who currently do not have a pension, to have professionally managed retirement savings giving excellent value for money. 

 

"This may well be the most significant financial asset of most people in the NPSS target group and it is right that any policy aims to ensure the highest standards in looking after their savings. 

 

"Our proposals take the outline recommended by the Commission and develops it into what we believe is a fully workable scheme."