The government is still refusing to concede its national pensions savings scheme (NPSS) could leave some employees worse off, Treasury select committee documents show.
The committee has finally published the government’s response to its questions about the design of a NPSS.
Despite questions raised by the committee and a host of pensions experts about whether means-tested benefits, available to those who have not saved a big enough pension pot, mean some people should not save, the government once again argued its handouts should not stop people putting cash into its scheme.
Pension provider Standard Life claimed work it carried out clearly illustrated that many people would be better off not joining personal accounts as this would jeopardise the amount of means-tested cash they could get from the government.
Andrew Tully, marketing technical manager of Standard Life, said this was because their savings within personal accounts would simply replace means-tested benefits that they would have received from the state if they had not saved.
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Tully said: “It is vital that everyone being automatically enrolled can be confident that they will be better off by saving, but this is not currently the case.
“The government needs to accept that this is a major issue and be open to discuss ways in which this problem can be overcome.”
