Standard Life has approached the Pensions Policy Institute to see if they will review and endorse the research it submitted as a response to the pensions white paper consultation.
John Lawson, head of pensions policy at Standard Life, says it is hoping the PPI will be able to validate particular parts of its research, including the calculations about those who will not benefit from the proposed personal accounts, and also whether the PPI has a better source of underlying data for the calculations.
In its submission to the Department of Work and Pensions (DWP), Standard Life suggests if personal accounts are introduced with means-testing still in place, the system will be ‘unsafe’ for about 60% of the planned target market.
While Standard Life is confident of its calculations it is hoping validation from the PPI - as an independent think tank - will make government ministers take more notice of the figures so they are not seen as biased in anyway.
Lawson says it would be interested to know if the PPI has a better source of data to find out whether there are any major differences to its modelling, and make sure the calculations are accurate.
But he says: “The one thing we missed out of our calculations is situations where people having existing savings. If somebody has £6,000 in savings, it equates to about £3.84 a week compared to an average basic state pension of between £70 to £84, so I very much doubt it will make any kind of difference.”
While he says it is early days in its discussions with the PPI, he says the calculations made by Standard Life suggesting it is not worthwhile saving for around 60% of the population, are "well within the PPI’s ‘funnel of doubt’".
As he points out the PPI has said there will be a significant number of people who will be affected by means-testing by the time personal accounts are introduced.
Lawson argues if the proposals go ahead as they stand, it could challenge the concept of treating customers fairly (TCF), and is an issue which could not simply be addressed by auto-enrolment.
He adds: “We’re keen to get an external stamp on the research to say it has been reviewed and that it is accurate. If for 50-60% of people it is going to be pointless to save, that is a structural problem which needs to be addressed now.”
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