You are here: Home - Saving & Banking - News -

Personal account pensions to ‘cost four times more’

Written by:

The cost of setting up a personal account pension – the latest brainwave in the Government’s campaign to get people to provide for their retirement and due to be introduced in 2012 – may be four times current estimates, according to the Association of British Insurers (ABI).

Director general of the ABI, Stephen Haddrill, told the Work and Pensions Select Committee that it could cost £20 to set up an individual personal account.

As those without a good workplace pension or personal pension plan would be compelled to join, this is regarded as a politically sensitive issue.

The Government was hoping that the set-up costs of the new pension fund – proposed in 2005 – would be in the region of £5. Automatically enrolled employees will pay in 4% of their salary, with the contribution topped up by an extra 3% from employers and 1% of salary in the form of tax relief.

The original proposal for the scheme was that set-up costs would be very low, and annual charges kept to around 0.3%, although the ABI has always maintained these costs would be higher.

A spokesperson for the Department of Work and Pensions said: “It is too early to provide further specific costings while the business requirements for personal accounts are being developed.”


Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Pensioners win case but no cash

Four pensioners who lost most or all of their company pensions have successfully won their High Court case against the Government.