The government is moving in the right direction with its proposed personal accounts scheme, it has been claimed.
Stephen Haddrill, director general at the Association of British Insurers, has made his comments after the government announced changes to the national pensions savings scheme following industry consultation on the Personal Accounts: a new way to save white paper.
More specifically, Mr Haddrill has argued that the government's decision to cap annual personal account contributions at £3,600 is "the right decision".
And he has also indicated that the decision not to subside personal accounts using money from the taxpayer was "a positive step".
However, the proposed pension scheme still needs further work, he has contended.
"There is a lot more work to be done over the coming months and years to ensure that personal accounts and the existing pensions market complement each other," he said.
The government intends to roll out the personal accounts pensions vehicle by 2012.
Under the system, employees will be asked to contribute a minimum of four per cent of their earnings into the new pension scheme, while employers will put in a further three per cent and the government will add one per cent as tax relief.
Revisions to pension scheme welcomed
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Revisions to pension scheme welcomed
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