Guardian Employee Benefits is predicting a stakeholder misselling scandal because the pension will n...
Guardian Employee Benefits is predicting a stakeholder misselling scandal because the pension will not provide a high enough level of advice to employees.
The group's managing director, Ray Milne, said there was not enough focus on advice and the Government risked failure in increasing privately funded pension provision. Milne said the Government's target stakeholder group of those earning between £9,500 and £21,600 will not be overly encouraged to take up a pension plan simply because they are available. He believes compulsion is necessary if stakeholder is to be successful.
He said: "The core issue that still needs to be brought to the fore by the Government is the role that advice for individuals will have in stakeholder pension, and the scope to cover its cost within the charges applicable to the contract.
"The proposed 1% limit on charges does not leave room for personal advice and this lack of proper advice gives serious potential for individuals to make wrong choices."
In this scenario Guardian has argued individuals could easily breach contribution limits through ignorance, pay into too many pensions or contribute inappropriate amounts.
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