Footballers' Wives, 1 stakeholder pensions, 0

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The Independent Online

Would you stay behind for an hour after work if your boss gave away free money?

Would you stay behind for an hour after work if your boss gave away free money?

I'm sure your answer is the same as mine. But replace the words "free money" with "free pension contribution", and perhaps your response would be less robust, peppered with "ah..."s and "um..."s or "I'm busy, actually".

The insurer Legal & General, which is busy trying to sell its stakeholder products to staff in companies around the country, reports reactions such as these.

Meetings arranged after five o'clock muster a pitiful turnout, even when the employer is happy to invest the equivalent of 4 or 5 per cent of staff salaries into a pension fund.

Yet hold a "stakeholder sign-up" meeting during office hours, says L&G, and the result will be dramatically different. In the space of 60 minutes, a room full of workers turns into one full of new savers.

At the Eden Project in Cornwall, only 75 workers out of a 500-strong, relatively low-paid workforce have so far signed up for a stakeholder pension. And in this case, the employer is generously prepared to contribute a staggering 9 per cent of salaries if its staff chip in 5 per cent themselves.

Although the Eden Project bosses are hoping more people will come forward, their stakeholder pension scheme has already been on offer for more than a year.

It all points to a deeper malaise affecting those of working age in Britain. A cartload of criticism has been heaped on stakeholder schemes, which are perceived as boring by savers and, with their capped charges, are hardly money-spinners for the insurers that provide them. Yet they are essentially cheap and, crucially, practical savings products. They offer an incentive to people who would otherwise be forced to pay low premiums into expensive group pension funds that often carry high charges and punitive exit penalties.

Job-hopping is commonplace in today's working world, and stakeholder schemes have the flexibility to allow you to carry on saving however many times you change employer.

Diane Buckley, director of business development at Legal & General, is optimistic that the industry can overcome the shockingly low take-up, particularly among the low-paid. She predicts the trickle will slowly become a stream, if not a river, as staff who take the plunge recommend the schemes to their colleagues.

It's hard to imagine stakeholders replacing Footballers' Wives or EastEnders as the number one topic of conversation at the water-cooler. Yet the message needs to get across, and not just about stakeholders, either. We need to be saving money for our old age, be it through company pension schemes, individual savings accounts (ISAs), investment bonds, capital protected products or unit trusts. Whatever we put by, something is better than nothing.

But if, as it seems, we can't trust ourselves to save, then the Government must take some responsibility for encouraging us to do so. This doesn't appear to be happening at present. Last week it was confirmed that allowances for both cash and equity ISAs are to be slashed.

Making it compulsory to save for a pension remains off the radar. It seems that such a policy would be too big a pill for Labour to ask the electorate to swallow.

Meanwhile, millions of people risk being left with little or no savings to rely on in their retirement. A 32-year-old friend of mine is typical of the many who have yet to bother with any form of pension. He is counting on his parents' house to provide for his retirement. When a generation of Britons are gambling with their future in this way, it is time for the Government to take action.

Signs of life at Standard

It won't happen until 2006 but a vote to demutualise the insurer Standard Life is definitely on its way.

For its with-profits policyholders, the windfall payout - whatever its size - might seem neither here nor there after the losses suffered during two years of bonus cuts and falling policy values.

However, the company's demutualised reincarnation could prove its salvation. Hopefully, long-term savers will decide to stick with it rather than taking the windfall and throwing in the towel.

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