UK - The PEP and ISA Managers' Association (PIMA) has announced its blueprint for replacing the Government's hitherto unpopular Individual Pension Accounts (IPAs).
PIMA’s proposal, which it has just submitted to the Inland Revenue, is for a Retirement Savings Account (RSA), based on the more popular, comprehensive and tried and tested ISA formula.
PIMA firmly believes the ISA structure to be the best vehicle for personal investment. Using the ISA format for pensions savings would fit nicely with the Government’s recent drive to simplify the investment process. PIMA considers this another step towards the development of a family of ISA products designed to encourage short, medium and long term private lifetime investment.
Tony Vine-Lott, director general of PIMA, said: The ISA has inbuilt credibility. Our proposal for a Retirement Savings Account forms part of PIMA’s vision to develop ‘cradle to grave’ ISA coverage to encourage medium to long-term saving.
It is widely acknowledged that the IPA has met with little success since its launch in April last year. We consider the chief reasons for the lack of popularity are: complexity; public apathy associated with pensions products; a resentment of the compulsory annuity; cost and lack of transparency, together with the fact it was launched on the same day as the Government’s stakeholder pension - somewhat stealing the IPA’s thunder.
PIMA intends to continue to lobby Government and opposition parties to build a cadre of both political and industry support for constructive change.
By Luke Clancy
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