Using "unrealistically low projection rates" will deter people from saving and make it harder for consumers to decide between different funds, Aegon has warned.
The Financial Services Authority (FSA) wants to cut pension protection rates from 7% to 5% to give consumers more realistic expectations of retirement income. However, Aegon said the move is likely to deter people from saving entirely and could also prompt them into making poor investment decisions between funds. It made the comments in its response to the FSA Consultation Paper CP 12/10 on product projections and transfer value analysis. Aegon said watchdog's proposals were based on ‘arbitrary' investment assumptions - that a typical fund was invested two thirds in equities, and o...
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