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Personal accounts should not be scrapped: TUC
The Trade Union Congress has balked at the suggestion by pensions expert Dr Ros Altmann that the personal accounts scheme should be scrapped.
Brendan Barber, general secretary at the TUC, said ditching the personal accounts scheme would leave millions of people vulnerable.
He said: "Scrapping the new duty on employers to contribute to the pensions of their staff, would be a huge step backwards, and leave millions unpensioned.
"The new system is far from perfect and has already been delayed, but the challenge is to make it better, not to tear it up and start again."
Dr Altmann said the scheme would make pension provision worse as employers take advantage of lower pension contributions in personal accounts.
She said: "This whole policy should be put on hold, while a proper re-assessment is conducted. A nationally organised, low cost private pension scheme does have theoretical attractions. But in the current environment, it is not suitable."
Dr Altmann said Isas may be more appropriate for younger savers with larger debts, and called for perceived problems in the design of personal accounts to be addressed.
The independent policy adviser said financial companies would stand to benefit the most from the introduction of personal accounts as they earn fees to manage them.
She said: "Politicians are only worried about people putting money in, and the financial companies also see tempting large pools of assets for them to earn fees on, but what matters is that the workers get good pensions out."
