17 October 2007 – Personal Accounts – consumers given a voice
Consumer groups will be given a key role in advising on plans for the personal accounts scheme to help millions of people save for retirement for the first time.
A Consumer Representative Committee will work with the Personal Accounts Delivery Authority, the body advising on setting up a national pensions scheme targeted at low to moderate earners who currently don’t have access to a workplace pension.
The new committee will be chaired by PADA non-executive director Jeannie Drake and will advise the authority’s main board on issues relating to consumers, including future members of the personal accounts scheme.
Jeannie Drake said:
“Consumer representation is vital to the success of the scheme and the work of the delivery authority: it is essential that people feel it is their scheme; that their voice is heard and that the scheme is responsive to their needs.
“The consumer representative committee will provide advice and guidance to the delivery authority based on its specialist consumer insight and will act as a forum for sharing ideas and research - as well as a consultative channel.”
Groups including Which?, Citizens Advice, the Equalities and Human Rights Commission, the Financial Services Authority Consumer Panel, Age Concern, Help the Aged, the Fawcett Society and the TUC have been invited to help set up the committee. The final membership will be decided at a later date.
Pensions Reform Minister Mike O’Brien said:
“Personal accounts will be good news for consumers - providing millions of low to moderate earners with access to an occupational pension with an employer contribution for the first time – and offering low charges so that they can keep more of their pensions saving.
“I am pleased that the delivery authority has taken this step which shows our ongoing commitment to providing good value for savers, and engaging with key stakeholders as we set up personal accounts.”
Notes to editors
- Personal Accounts Delivery Authority chair Paul Myners announced the formation of the new committee at today’s Work and Pensions Select Committee hearing.
- The first meeting of the Consumer Representative Committee will be in the next few weeks.
- The Pensions Act 2007 provided for the Personal Accounts Delivery Authority
to be established. In its initial stage the Authority’s remit is to:
- provide advice and make recommendations to support the Government in understanding the operational and commercial implications of the options for delivering personal accounts; and
- advise on the design of the commercial strategy, including the financial, technical, commercial and communications analysis needed for scheme development.
- The Government plans to legislate further in a second Bill, extending the Delivery Authority’s remit and giving it executive powers to then assume responsibility for delivering the personal accounts scheme and the system to ensure that employers meet their new obligations within a framework set by Government.
- Employees will contribute a minimum of 4 per cent of their earnings (between approximately £5,000 and £33,500) a year, matched by a minimum 3 per cent employer contribution and around 1 per cent in the form of normal tax relief from the Government.
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