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AFIFA cautious over pension reforms

The Association of Independent Financial Advisors (AIFA) is petitioning the Chancellor of the Exchequer, Alistair Darling, not make “radical changes” to the pensions market in next week’s Budget.

Chris Cummings, director general of the Association, is broadly in support the Government’s pension reforms but believes that they require “more clarification”.

For example, some workers will be best served by opting out of the proposed Personal Accounts scheme because of the means-tested benefits systems.

Mr Cummings points out that there is a lack of advice available to employees and is recommending that IFAs either offer pro-bono work or could be paid by employers to give staff the individual advice they need.

AIFA is also concerned that “good employer-sponsored pension schemes may ‘level down’ to the minimum contribution requirements of Personal Accounts”.

In related news, the Pension Protection Fund has announced plans to charge higher premiums for companies with pension schemes that are reliant on risky investments, such as equities.

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