The Chair of Work and Pension select committee Annie Begg has expressed her apprehensions about possible misselling of flat rate pensions by advisers unless the government make clarifications before auto enrolment begins.
Big corporations have volunteered to enroll employees in the National Employment Savings Trust (NEST) by the end of the current year.
Labor MP Ms Begg said that ambiguity over the government’s reform of state pension policy makes it difficult to advise if they should opt out of auto-enrolment.
“Advisers are nervous that they might be guilty of misselling because they do not know what is going to happen with the state pension”, said Ms Begg.
“It is really important that the Government is absolutely clear on this so people considering opting out of auto-enrolment know what will happen with their pension by the time they retire”, she added.
Agreeing with Ms Begg’s view, Tony Catt of Managing Partners Capital said: “The flat-rate pension will encourage people to save and send them toward advisers”.
The government however, should come out with clear instructions, he feels. “Without clarity on how much people will get, advising people on NEST or other pensions is difficult”, he said.