Money News: Savings shortfall and the raising of the retirement age

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The Independent Online

Pensions: public have their say

Britain is to hold a National Pensions Day, probably in March, to hear public opinion on proposals made in the Turner report on long-term retirement saving.

The Department for Work and Pensions will hire consultants to talk to a representative sample of people across the country ­ understood to be in the thousands ­ while every individual will also be invited to send emails in to the Government.

The idea is to gather comments on Lord Turner's proposals, but particularly on raising the retirement age for the basic state pension to 67 or 68 and linking it to rises in earnings instead of inflation. The concept of a national pension savings scheme will also be up for discussion.

"We are determined to reach as broad a consensus as possible," said John Hutton, Secretary of State for Work and Pensions.

"The next part of the debate will involve testing the ideas in a series of events that will enable people to tell us what they think about the solutions set out by the Turner Commission."

The commission was given the brief of finding a solution to Britain's long-term retirement savings shortfall, estimated to be some £57bn last year.

The gap represents the amount that remains to be saved if people want to retire in the future on the living standards they enjoy today.

Child trust funds: Parents at risk of losing money

Tens of thousands of parents are in danger of losing the right to choose an investment vehicle for their £250 child trust fund (CTF) voucher.

The first vouchers were sent out in early January last year, with a 12-month deadline for selecting a fund provider. For many families, time is now running out.

All children born on or after 1 September 2002 are eligible for the £250 (£500 for low-income families) but there has been a poor take-up by parents ­ whether through genuine loss of the voucher, laziness, forgetfulness or uncertainty about how to invest the money.

By 20 November, the total number of vouchers issued had reached 2,135,000. However, the take-up was only 1,164,000.

If parents miss their deadline, it is left to the taxman to pick an investment fund at random from a select panel of financial providers. A number of these "default" funds levy charges of up to 1.5 per cent ­ the highest allowed in the CTF scheme.

Officials at HM Revenue & Customs are to start allocating stakeholder funds to those who have not made a decision inside their deadline.

These parents will already have lost out on nearly a year's worth of tax-free interest on the original £250 investment.

Financial advisers and providers warn that confusion is partly to blame. Parents can choose from a low-risk cash fund with steady returns; a cheap stakeholder fund that invests in stock markets until the child is 13, when the money is slowly pulled out; or a straightforward unit trust with higher charges.

But many people simply don't know which fund is right for them. Parents seeking help should try the official government website: www.childtrustfund.gov.uk.

Bedside consoles: Hospital call costs could face surgery

The high cost of phone calls from family and friends to the bedsides of hospital patients is to be reviewed by the Department of Health.

The move comes at the end of a six-month investigation by Ofcom, the telecoms regulator, into charges of up to 49p a minute for placing a call to the new breed of bedside consoles, which also let patients watch TV and access the internet.

Two console companies ­ Patientline, run by former prisons director Derek Lewis, and Premier ­ were at the heart of an investigation sparked after more than 30 consumer complaints about call costs.

However, Ofcom made it clear that high call costs were not the fault of these suppliers. Rather, it was a "complex web of government policy and agreements between the providers, the NHS and individual hospital trusts".

One problem has been the rule that hospitals must pay nothing for the consoles. The cost of introducing the scheme has been borne by private firms with no financial help from the Government ­ with attendant high prices to recoup the money.

Ofcom has now recommended that every financial aspect of the in-house entertainment consoles ­ which have been rolled out in nearly every large UK hospital ­ be scrutinised. One area under investigation will be the "disproportionate cost borne by friends and family".

In particular, Ofcom noted the existence of a long introductory recorded message for callers, and has already asked both companies to consider a "skip" option.

The watchdog will deliver a final conclusion after the Department of Health review.

Equitable Life: Government to be probed on insurer

A European Parliament committee is to examine the role of successive UK govern- ments in the near-collapse of insurer Equitable Life.

The inquiry will take about a year, but will publish an interim report after four months. Its focus will be on whether UK regulators failed in their duty to protect Equitable Life policyholders, and whether the government of the day complied with EU regulatory requirements.

The insurer, the world's oldest mutual, came close to collapse in 2000 after a House of Lords ruling on pensions liabilities created a £1bn hole in its finances.

Members have suffered a cut in the value of their policies as the insurer has struggled to shore up its finances.

In 2004, Lord Penrose published a report on Equitable Life, blaming the management team. But the gov- ernment was also accused of some regulatory failure.

Ann Abraham, the Parliamentary Ombudsman, has launched a further inquiry into the way in which the government handled its regulatory obligations; she is due to report later this year.

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