08 December 2010
The Association of British Insurers has responded to the report
'Tomorrow's Investor: Building the consensus for a People's Pension
in Britain' by the Royal Society for the Encouragement of the Arts,
Manufactures and Commerce (see our News Item on 7 December
2010).
Maggie Craig, the Director General said:
"It is wrong to compare the Dutch pension model with private
pensions in the UK - it is comparing apples with pears. Dutch
schemes have massive economies of scale as they are compulsory
schemes and supported by the Government. More importantly, Dutch
schemes have not been problem-free - in fact, it has been announced
that from January 2011 the pension payments for thousands of
pensioners will be cut. They had saved in the kind of collective
scheme put forward by David Pitt-Watson.
David Pitt-Watson's calculations of charges in a typical UK
pension are also misleading; UK personal pensions are good value
for savers with the typical pension charge between 0.5-1 per cent.
People paying the higher charges he quotes have chosen more complex
products or investment options, and tends to be higher wealth
individuals looking for higher end investment advice.
The biggest challenge we face is that too many people are not
saving for their retirement in any kind of scheme, or saving far
too little. False comparisons and selective use of charges will not
help solve this problem."
