ABI: Labour pension reform policy has “back of an envelope feel about it”
Responding to the Labour policy document on pension reform, Otto Thoresen, Director General, Association of British Insurers said:
“Much of this so-called policy document has a ‘back of an envelope’ feel about it. This is a disappointing and hugely misleading report from Labour. Most private pensions work well for their customers, charge fairly and give clear information about how they work.
“Charges have been falling steadily for the last decade and the average Annual Management Charge is now just 0.77%. The extra costs Labour highlights are transaction costs that include stamp duty and relate only to particular types of actively managed funds. If Labour is concerned about the costs of pension schemes, it should commit a future Labour government to lowering this stamp duty. The fact remains that the most important factor in how much a pension pot accumulates is how much is contributed to it, not the charges.
“We are about to begin the most important pension reforms since the 1940s, reforms developed by a Labour government in partnership with a fully supportive pensions industry. It is hugely frustrating that just as we try to begin to sign up workers to the pension savings schemes they need, Ed Miliband has decided to undermine confidence in pension saving by this highly selective and one-sided analysis.
“The UK pension industry is committed to continuing to evolve to serve its customers better, through better annuity choices, continuing to reduce charges and providing the clearest possible customer communications. As one of the UK’s leading industries, we will always welcome open and unbiased dialogue with the political parties about how to tackle the UK’s chronic under-saving for the challenges of the future.”
For enquiries and further detail on the proposals if required, please contact
Adeola Ajayi – Adeola.Ajayi@abi.org.uk – 07725245284
Sarah Bailey – sarah.bailey@abi.org.uk – 07725372636
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