Personal Pension Plans (Hansard, 24 February 2003)

§ Mr. McCartney

As the Green Paper 'Simplicity, security and choice: working and saving for retirement' (CM 5677) states that the decisions over how much pension an individual should have depends on their individual preferences and circumstances. Therefore, it is not appropriate for the Government to seek to stipulate the level of income that any particular person will need in retirement, and consequently the additional saving any one individual should make.

We are committed, however, to actively encouraging people to consider their pension saving options early so that they have as clear a view as possible of their own pension funding needs. The Green Paper, sets out the Government's proposals to work with employers and the financial services industry to provide:

A simple framework to help people understand their choices; Financial education and awareness to navigate the system, including access to generic financial advice 200W for the mass market; Personalised information tailored to individual circumstances, so people can make informed choices; and a choice of suitable products.

We are already running a pension education publicity campaign to make people aware of the importance of saving for retirement. The campaign is supported by a range of guides that provides information on pensions options. The current phase of activity started on 8 February 2003. In time, we plan to move the campaign forward from awareness so that it is more focused on taking action.

In addition, we have already introduced measures to inform individuals of the level of pension they can expect when they save in a personal pension. New regulations that come into force in April require money purchase pension schemes(occupational, personal and stakeholder) to give members an annual illustration of what their pension might be when they require. This will give them important information about how their pension plan is progressing.

The Green Paper, therefore, sets out proposals for building on work that has already been done, as well as identifying new initiatives, in order to provide a coherent education and information effort. This will enable individuals to make choices as to the level of funding for their personal pensions.