Government must not risk pensions future with poor design of personal accounts

New ABI (Association of British Insurers) figures show that 2006 was a record year for growth in life and pensions new business.

For the first time, APE sales broke the £15 billion barrier, reaching a total of £15.46 billion. Individual pensions regular premium new business once again performed strongly, increasing by 45% from £2.1bn in 2005 to £3.0bn in 2006. The pensions tax simplification regime, which came into force on ‘A-Day’, 6 April 2006, was the main driver of this growth.

Stephen Sklaroff, the ABI’s Deputy Director General, said: “The Government’s A-Day reforms have helped to stimulate growth in personal and group pensions, encouraging many more people to begin building up funds for their retirement. The challenge now is to get the design of the new Personal Accounts right. Changes will be needed if good existing pension schemes are not to be undermined.”