DWP announcement on personal accounts a wise decision

Commenting on today’s announcement from the Department for Work and Pensions, Richard Saunders, Chief Executive of the Investment Management Association said: “The reduction in the cap from the previously proposed £5,000 is a wise decision. It will help to focus the scheme on the target market and protect it against unfounded charges of mis-selling. The statutory minimum employee contributions will benefit from additions by the employer, but top-ups by the individual will not. The bigger the scope for unmatched top-up payments, the harder it becomes to avoid incorporating expensive regulated advice into the system.

”By limiting the cap to £3,600 this decision provides a firm foundation for the further development of the scheme.”