Insurers slam UK’s stakeholder pensions
UK – The insurance industry body has slammed the UK’s new stakeholder personal pensions schemes - though the government says the scheme has made an “encouraging start”.
The Association of British Insurers says that 82% of employer-sponsored stakeholder pension schemes are so-called “empty boxes” with no pensions yet active. The ABI has called for more action to help employers to promote pensions take-up.
But a Department of Work and Pensions spokeswoman said that the 1.5 million sales since the launch of stakeholder in 2001 was a “pretty encouraging start”.
“We are going to look at this report very carefully,” she said, adding that the government knows that it needs to change attitudes to saving.
The ABI says that 350,000 employers have designated a scheme – which the government says is 90% of those who should be doing so. The insurers also said that just 13% of employer-based schemes have employer contributions.
“Stakeholder pensions have so far fallen short of expectations,” said ABI director general Mary Francis. “We must need more action now to ensure that people use them to start saving for a decent retirement.”
The ABI also found that 47% of all payments into stakeholder pensions so far are “simply transfers from other pensions so do not represent new provision for retirement”. And the average contribution is 117 pounds a month.