Confusion reigns over stakeholder pensions

The Government's failure to produce comprehensive pensions legislation is leading to confusion over pension planning.

A survey from the National Association of Pension Funds says employers are keen to instigate change but their hands are tied because of the piecemeal nature of the Government's plans.

Unless Jeff Rooker, the Pensions Minister, makes a concerted effort to clarify the future direction of the pensions industry, retirement fund provision will suffer.

This year only 12 schemes (3 per cent of the total number) have improved their benefits, compared with 7 to 10 per cent over the past five years.

Chris Armitage, pensions manager for Unigate, claims that the lack of change is not because of unwillingness among employers to increase spending on pensions but because of uncertainty over what the proposed changes will mean.

He said:"The survey shows that a third of employers would be happy to make their schemes compulsory for employees - a move that would obviously involve an increase in ex-penditure.

"The problem is that it is getting harder to establish and run schemes.

"With more legislation likely over the next 10 years, companies are reluctant to instigate changes now when more will be needed in the near future."

Pensions, by their nature, are geared towards the long term. But as the Government dithers, pension managers are having trouble predicting what is going to happen in the future.

The NAPF attributes the lack of certainty to the absence of a grand strategy on the part of the Government.

"We welcome the consultation that the Government has given us," says Ann Robinson, director-general of the National Association of Pension Funds. "But the legislation that follows is just piecemeal and doesn't go far enough."

Plans for stakeholder pensions are set to be introduced in April. The intention is that they will encourage people to save towards their retirement. But worryingly, 72 per cent of those who participated in the NAPF survey and operate money purchase schemes, still do not know whether they intend to apply for their pension scheme to be registered as a stakeholder scheme.

At this stage, not one provider will stick its neck out and commit itself to replacing existing arrangements with a stakeholder scheme.

The stakeholder plans are the main cause of uncertainty because the Government has yet to disclose the tax details. Until it does so, committed support for the new plans is unlikely to be forthcoming.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
peoplePair enliven the Emirates bore-draw
Arts and Entertainment
tvPoldark episode 8, review
News
Britain's opposition Labour Party leader Ed Miliband (R) and Boris Johnson, mayor of London, talk on the Andrew Marr show in London April 26
General electionAndrew Marr forced to intervene as Boris and Miliband clash on TV
Arts and Entertainment
Ramsay Bolton in Game of Thrones
tvSeries 5, Episode 3 review
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence