ABI: New European regulation must not harm pensions automatic enrolment

ABI: New European regulation must not harm pensions automatic enrolment

ABI: New European regulation must not harm pensions automatic enrolment

The proposed European Consumer Rights Directive should improve consumer protection across Europe, but it must not be allowed to affect the ability of workplace pension schemes to automatically enrol employees, according to the ABI.

The ABI’s Director of Consumer Affairs, Maggie Craig, gives evidence to the House of Lords European Committee on the Directive on Thursday 21 May. Speaking ahead of her appearance, she said:

“The UK already has very high standards of consumer protection, especially in financial services. For this reason, financial services are mainly exempt from the Directive’s provisions, and we hope that this will continue.

“However, we have particular concerns that the Directive could be amended during negotiations to prohibit the use of automatic enrolment into workplace pensions schemes, a key feature of the Government’s pension reform programme due to come into force in 2012. The ABI successfully persuaded the European Commission to agree that ‘inertia selling’ bans in previous Directives would not apply to pensions automatic enrolment. Amendments to the Consumer Rights Directive must not be allowed to call this into question.

“The same concern applies to automatic renewal of insurance policies, a process which works well for consumers but which could be outlawed by this Directive. We are seeking guarantees that the Directive will not affect this long-established and understood practice.”

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Notes for Editors

1. Enquiries to:
Jonathan French 020 7216 7392 (Mobile: 07958 330 480)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)

2. The ABI is the voice of the insurance and investment industry. Its members constitute over 90 per cent of the insurance market in the UK and 20 per cent across the EU. They control assets equivalent to a quarter of the UK’s capital. They are the risk managers of the UK’s economy and society. Through the ABI their voice is heard in Government and in public debate on insurance, savings and investment matters.

3. Maggie Craig gives evidence before the House of Lords European Committee on Thursday 21 May 2009.

4. The ABI’s written evidence to the Committee is available on the ABI web site, www.abi.org.uk.

5. An ISDN line is available for broadcasts.

6. More news and information from the ABI is available on our web site, www.abi.org.uk.