Government Clings To Low Charge Pension Belief

Published / Last Updated on 10/01/2007

The pension industry thinks that the Government is clinging to its hopes that pension personal accounts can be delivered at a charge of 0.3 per cent. Mr Hutton said that this target is realistic if the government produces enough volume and simplicity.

Mr Hutton has left options open for an industry scheme and he says that the second white paper will focus on personal accounts and is the last chance to stop the pension issues from slipping through the governments fingers.

Our view

If there is investment risk, people need advice. This cannot be delivered with an annual charge of 0.3%. The problem is the liability created with advice. People with either make mistakes as they take no advice or they will pay more and take advice. A dangerous cocktail.

Interest Rates Up 0.25% to 5.25%

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