Fri, 30 Nov 2007

New pensions 'will be mis-sold'

Proposed Personal Accounts as the Government’s way of alleviating the pensions crisis ‘will definitely be mis-sold’, Dave Roberts, a senior consultant at Watson Wyatt, told the autumn Payroll World conference.

The issue dominated discussion at the Question and Answer session at the close of the morning session of the conference.

Personal Accounts will be a low-cost, defined contribution pension arrangement. Workers earning more than a minimum threshold and aged between 22 and the state pension age will be enrolled automatically, unless they are to be autoenrolled into an alternative employer-sponsored scheme meeting certain criteria. They are due to start in 2012.

Mr Roberts said: ‘There are issues around advice. Personal Accounts will definitely be mis-sold.’ Employers’ contributions will be 3% and employees’ 4%, with the Government adding 1% tax relief.