UK - The government will fail to protect millions of Britons from poverty in old age unless it makes vital changes to the way in which it plans to introduce personal accounts, a Royal Society for the Encouragement of Arts, Manufactures and Commerce report said.
The educational society's report - Pensions for the people: addressing the investment crisis in Britain - concluded that, although the government's policy of auto-enrolment and personal accounts represented a big opportunity for UK savers, the scheme must be extended to cover pension payments above £3,600 (US$5,783) if it is going to have a major impact.
It said by limiting pension payments to £3,600 many savers across the UK will be forced to open private pensions charging "exorbitant" costs.
The report, written by Hermes Equity Ownership Service founder and fund manager David Pitt-Watson, argued that this simple step would not require employers to match higher levels of saving - and just require the government to lift the £3,600 limit on contributions.
It added the infrastructure of the personal accounts system should be made available to a wide range of approved providers that conformed to the basic principles of responsibility and low cost.
And it made the case for the development of a new type of pension fund that would cut costs by two-thirds, increase returns on pension savings by up to 50%, and work to ensure companies are run in the interest of long-term owners.
In this week's Pensions Buzz, we want to know if you believe there is ever a case for combining retirement savings products with other savings products, and if the PPF levy for sponsorless schemes is appropriate for DB consolidators.
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