The Liberal Democrats have called for a shake up in financial education to enable personal accounts to work without expensive regulated advice. They have also called for greater flexibility in the system to allow savers to invest in funds of their choice, rather than the low-return safe option. They consider it is important to have a low-cost default option for people who do not want to take expensive financial advice, but if advice is taken, and savers do want to take more risk, then they believe that the system should allow that.
The Liberal Democrats are also concerned about the level of means testing that would be left, even after a return to earnings linked state pensions. They have called on the government to establish a second commission to look at the public sector, as they believe that this is an issue the government have 'flunked' so far.
Our view
The Lib-Dems are making unrealistic noises. Making people better educated in connection with financial services will not make them finance experts or advisers. The low risk option is, in our opinion, the only option if you are going to force people to have pension funds were there is no room for financial adviser. Letting people have a riskier fund choice will only mean that some people will do more damage than good!