Pensions Policy Institute examines personal accounts

Fri, 01 Dec 2006

The Pensions Policy Institute has published a report into the new personal accounts pension system.

As the government is set to introduce personal accounts in 2012, consumers will need adequate information in order to make decisions about the new pension system, the body claims.

The new document, entitled Are Personal Accounts Suitable for All, seeks to consider the individuals for whom personal accounts may not be appropriate.

Niki Cleal, director at the Pensions Policy Institute, claims that those contributing to personal accounts could receive strong returns after reaching retirement.

However, Ms Cleal warns: "A combination of career breaks and low earnings can increase the risk of finding personal accounts unsuitable.

"People in their forties and fifties today may get less value than today's younger people from personal accounts."

Ms Cleal added that individuals who are self-employed or plan to rent a property after reaching retirement may find that personal accounts do not meet their needs.

Earlier this week, secretary of state for work and pensions John Hutton claimed that the new pension bill would "significantly improve" provision of the state pension.


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