The RSA gives evidence to the DWP Select Committee showing that the government is undermining its own pension policy.
Whilst the RSA welcomes Government plans to extend pension provision in the UK (with the aim of reaching 7 million people who currently have no workplace pension), vital changes to the strategy need to be made.
The Government is planning to withdraw almost all consumer protection which prevents mis-selling of workplace pensions. This will affect everyone receiving a new workplace pension.
In addition, it has deliberately handicapped its own agency, the National Employment Savings Trust, costing the taxpayer millions of pounds, and preventing it from competing on a level playing field with its private rivals.
NEST should not be restricted to payments of £4200 in any year, which makes it uncompetitive, and raises costs to the taxpayer.
David Pitt-Watson, Head of the RSA Tomorrow’s Investor Project said:
"We are big supporters of the Government’s decision to introduce pension auto-enrolment, and establish NEST to offer comprehensive low cost pensions. But at the same time as the government espouses this positive policy, it seems to be working to undermine it. It is like sending soldiers to the front without adequate ammunition."
The RSA's opinion is echoed by consumer group "Which", who have said that regulation of personal workplace pensions is "falling through a massive black hole".
Responding to these concerns, the DWP Select Committee has ordered an inquiry into the likely impact of the government’s policy. The RSA will be giving evidence at its inaugural session.
David Pitt-Watson said:
"We welcome the DWP Select Committee’s decision to launch this inquiry. We hope that our parliamentary representatives will be able to persuade the government to alter its position before it is too late."
The Association of British Insurers (ABI) has pledged to introduce a new set of rules that will tell savers exactly how much of their pensions are being swallowed up by charges on an annual basis.