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date: 25 November 2009

embargo: For immediate release

Personal Accounts consultation right to focus on needs of low to medium earners

Responding to the new consultation by the Personal Accounts Delivery Authority (PADA) on personal accounts, launched today (Wednesday), TUC General Secretary Brendan Barber said:

'This is another milestone on the road to the new pensions settlement.

'PADA is right to focus in such detail on the needs and attitudes of low to medium earners who are not well served by the pensions industry at the moment. PADA's thorough work is a challenge to other pension providers to ask hard questions about their own default funds.

'This consultation document suggests that PADA is likely to introduce ethical and sharia fund choices, and will be a responsible investor.

'We remain perplexed by those who say they support auto-enrolment but question personal accounts. You cannot have auto-enrolment without a supplier that has a public-duty obligation to provide pensions to every employer who does not make alternative arrangements.

'There is a desperate need for simple low-cost pensions for low to medium earners as this has not been met by the pensions industry. The supposed problems with personal accounts such as the effect of means-tested benefits result from auto-enrolment and the relatively low contribution requirements. These problems would be worse if savings were invested in higher cost alternative products.

'Any sensible review of the 2012 reforms will simply end up reinventing personal accounts.'

NOTES TO EDITORS:

- All TUC press releases can be found at www.tuc.org.uk

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk

Press release (300 words) issued 25 Nov 2009