Standard Life responds to Personal Account White Paper

The Department for Work and Pensions has published the much anticipated White Paper on Personal Accounts.

Key highlights include: The contribution cap has been reduced to £3,600, rising in line with earnings, neatly fitting in with the tax system.

Confirmation that the band earnings for personal accounts will be £5,000 to £33,500, not the higher NI threshold introduced in the Budget.

Recognition of the anxiety of IFAs about the advice they could give on pensions on the lead up to 2012, seeking to agree a resolution with the FSA.

The second Bill will include a duty on the Delivery Authority to protect the existing pensions market.

John Lawson, Head of Pensions Policy, Standard Life said: "I am pleased the contribution cap has been set at the level proposed, which fits in neatly with the target market for personal accounts".

"We need to ensure existing savings and pension schemes are not cannibalised from 2012".

"The Government clearly recognises the issues as the Delivery Authority will have a duty to protect the existing pensions market".

"Personal Accounts are the most basic scheme an individual can save into, and therefore, for other pensions, the wider fund choice, ability to pay for advice out of charges and the flexible retirement options are still sufficient reason to justify the sale of such products over personal accounts".

"We still need clarity around the exemption of good contract based schemes such as group personal pensions and group stakeholder schemes, and where these types of schemes fit into the overall picture." 14 June 2007.

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