27 November 2006
Personal Accounts can succeed, but major change is needed to
revive the savings habit, according to Stephen Haddrill, the
Director General of the Association of British Insurers.
Addressing the fifth annual ABI Saver Summit, Stephen Haddrill,
said: "The pensions landscape is changing rapidly. But the majority
of us are seriously undersaving. We have a weak savings culture in
the UK and Personal Accounts have a mountain to climb.
"The Government is doing much to assist the climb. Automatic
enrolment. An employer's contribution. A simpler system. All will
stimulate saving. But let's not deceive ourselves. The British
non-saver will not be easily convinced to drop the spending
habit.
"So what must change to make a success of Personal Accounts?
"First we must attack the spending culture. As long as the word
on the streets is that it doesn't pay to save, people will do other
things with their money. Means testing must be radically reduced.
Nobody knows yet exactly what the Government's proposals will be or
will achieve. All we can say is we need a real step change in
public attitudes. Pussyfooting will not deliver that.
"Second, we need a well-informed public. A serious, large-scale
commitment is required. A ten year plan is a good idea, but we need
to see results from the outset. Without a major improvement in
financial capability, Personal Accounts will not succeed.
"Third, we need to keep Personal Accounts focused on the people
they are designed for. We must also ensure that existing pension
schemes are not dumbed down to the Personal Accounts levels and
dumped into the new system.
"The ABI looks for the success of Personal Accounts. But the
figures we are publishing on public attitudes show that nothing can
be taken for granted. We need the Government to act fast and
furiously to tackle our weak savings culture."
