UK - The introduction of personal accounts to parliament this week, as part of the new Pensions Bill, has been welcomed by industry with a warning that there are still challenges to be overcome.
Following the Queen’s Speech outlining the Bill, the government said the personal accounts scheme would aim to give those without access to a good quality pension scheme, in particular low to moderate earners, the opportunity to save.
The scheme will see people who do not belong to a workplace pension scheme automatically enrolled into a personal account and employers will be compelled to contribute.
Richard Saunders, chief executive of the Investment Management Association, said the Pensions Bill represented the next important step in making personal accounts a reality for the millions of people who were not saving enough for their retirement.
He said: “Now that the Delivery Authority has been set up to provide an independent and accountable governance structure the next challenge will be to design the framework for personal accounts in such a way as to provide maximum simplicity for employers and employees alike and to allow the expertise of the private sector to be harnessed in a competitive manner to deliver an efficient, low-cost, long-term savings vehicle for the target market."
Joanne Segars, chief executive of the NAPF, added: “The pensions industry must work hard with the government to instill confidence in personal accounts while making sure they do not replace existing occupational pension provision.”
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