Consumer groups in call for pensions safety net

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Consumer groups in call

for pensions safety net

By Alexander Jolliffe and Nicholas Timmins

Financial Times, April 3 2003 5:00

Budget 2003

Consumer groups are to urge ministers to set up a safety net to rescue investors' pension savings if their employers go bust.

The lobbying, by the National Consumer Council and the Consumers' Association, follows the collapse last year of ASW, a steel company, where employees lost most of their pension benefits. The calls come in the consumer groups' response to the government's pensions green paper.

Mick McAteer, senior policy adviser at the Consumers' Association, said: "The point of a safety net is to protect consumers against events which could wipe out pension savings overnight."

The National Consumer Council, which campaigns on behalf of low-income consumers, will this week urge Andrew Smith, the work and pensions secretary, to set up a compulsory insurance scheme for occupational pension funds.

Meanwhile, Legal & General has urged the chancellor to set a lifetime limit of £1.4m on pension contributions rather than cap the pension fund an individual can accumulate, under the Treasury's proposals to simplify the pension tax regime.