PPI warns over PA benefit problems – PP SPRING SHOW

The think-tank told delegates at the Professional Pensions Spring Show there were risks inherent in enrolling people already receiving benefits into personal accounts.

PPI director Niki Cleal explained: "The PPI have done lots of work in this area and have found that while there are some groups who are not at risk of issues in personal accounts – particularly young people – there are equally those groups at risk."

She said there was a negative interaction effect for those who rented in retirement – an effect which could leave those receiving housing benefit financially worse off.

Cleal added: "There is also an issue for older savers such people in there 40s or 50s and they have not yet started saving for their retirement. There is a risk that they may inadvertently disqualify themselves for pension credit."

She said that the most significant element of personal accounts was auto enrolment.

Cleal said: "For me, this issue will mean that millions of people will save for their retirement. That is what is great about this scheme but it is clear that there are risk groups. In such case opting out would be the best decision for them."