The Work and Pensions Select Committee has announced the launch of an inquiry into the proposals for a new system of personal accounts.
It says it is seeking written submissions from organisations and individuals following the government’s publication of the white paper: ‘Personal Accounts: a new way to save’ last week.
The 138-page document set out how personal accounts will be taken forward, based mainly on Lord Turner’s National Pension Savings Scheme (Npss) model, but with the added functionality of extra choice for more sophisticated investors.
However, the document was somewhat unclear on the subject of costs and charges, and how exactly it intends to minimise the levelling-down impact on existing occupational pension schemes.
At the same time, the document does not mention advice, generic or otherwise, an issue touched on by the Work & Pensions Select Committee in its report into pension reform in July, when it stated the provision of information “will be essential to ensuring the reforms are a success”.
And the Committee’s previous report also stated it is important people on low to median earnings have access to “clear financial advice and support to make the decisions they need about their financial future”, while adding a “strong case has been made for the provision of free generic financial advice to those on below median incomes”.
This latest inquiry also follows a previous investigation into Lord Turner's original Npss proposals by the Treasury Select Committee, who also concluded, in their final report in May, that any successful personal accounts system "must" include generic advice.
The deadline for written submissions to the new inquiry is 16 January 2007, with the Committee warning the short-time frame means documents should be no longer than 2,000 words, while oral evidence hearings are currently scheduled to take place in February next year.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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