Advice Needed For New National Pensions Savings Scheme
30 August 2006
More than 70% of callers in a recent survey by The Pensions Advisory Service (TPAS) have said they would need advice as to whether they should opt to stay in or come out of the new system of 'personal accounts' likely to come into effect in 2012.
An even higher percentage said if they did stay in they would need advice as to how to invest their contributions (79%) and on whether they were paying enough (76%).
78% of those surveyed were generally in favour of the new scheme with 74% supportive of the plans for automatic entry. 42% thought the Government should go further and make membership for employees compulsory. When asked whom they would trust more to run the scheme, 64% said the Government with 36% in favour of insurance companies or employers.
In relation to the proposed reforms of the state pension, 53% accepted that state pension age would have to go up to pay for higher pensions whilst 41% were against. Of those who said no, 54% preferred to leave the system as it was whilst 46% were willing to pay more for a better pension.
"It is very significant", says Malcolm McLean, TPAS Chief Executive, "that the majority of people we surveyed felt they needed some form of advice before committing themselves to personal accounts. We believe that a free, independent helpline such as the one we currently run will have an important role in helping and encouraging people to make the right decisions relevant to their own circumstances. Ultimately, the success or otherwise of the new system may depend upon it".
Notes to Editors
1. The Pensions Advisory Service (TPAS) is an independent body grant-aided by the Government which provides help and advice to the public on pensions. The service is free.
2. The Government's White Paper on Pensions Reform - Security in Retirement: towards a new pension system, was published on 25 May 2006. This proposed a new system of personal pension accounts into which most employees would be automatically enrolled but with a right to opt-out. Changes were also proposed to the qualifying conditions for the State Pension and the minimum age when it would become payable.
3. The TPAS survey received 1,346 responses mainly from callers to its helpline - 0845 6012923.
