Delay possible for Personal Accounts Pension scheme

by Gill Montia

Story link: Delay possible for Personal Accounts Pension scheme

The Government’s personal accounts pension scheme, which is scheduled for launch in 2012, could be delayed.

In an interview on the BBC’s Money Box programme, Tim Jones, chief executive of the Personal Accounts Delivery Authority admitted there is a “possibility” of a delay.

The new scheme applies to those earning between £5,000 and £33,500 and will require people to pay 4% of their salaries into a pension fund, with employers adding a further 3% and the government 1%.

Meanwhile, the retirement insurance director of Prudential is advising those saving for retirement to make sure their investments are spread across a range of assets.

Ali Crossley is concerned that many people are continuing to rely on property investment as their sole means of providing an income, when this strategy may not provide the capital they want in later life.

She believes that: “Property has been a much relied upon asset class, and it’s unwise, as we know from history, to over-depend on any one asset class.”

Ms Crossley believes that the impending pension crisis will be exacerbated by the fact that people in their mid-30s are not investing in pension schemes because they mortgage payments are absorbing a high percentage of disposable income.

Prudential recently published a survey which revealed that 25% of people expecting retiring during 2008 will be replying on upon the state pension as their main source of income.