Questions over Tory pension compensation plan
A coalition of building societies has questioned whether one of the Conservatives’ flagship pension policies is legal or costed.
The Conservatives’ pension spokesman, David Willetts, today launched his party’s eight point plan for improving pension provision.
He suggested that the unclaimed assets in bank and building society accounts could be used to rebuild the pension funds of those who have lost their occupational pensions when a scheme has been wound up without sufficient assets to pay its liabilities.
However, this funding plan has drawn some criticism. The Building Societies Association (BSA) claimed today that the plan to recover unclaimed assets is “uncosted”. It claims that its survey suggests that £33 million is held in unclaimed assets, a fraction of the £15 billion which has been widely quoted.
It also questions whether the money could be legally withdrawn by the government, and points out that building societies use the money for the collective good of its members, for example providing good value mortgages.
Adrian Coles, director-general of the BSA, said: “At no point have we been consulted by the Conservative Party about this policy. We dispute the figures involved. We also strongly question the right of any organisation, government or otherwise, to take money from building society members. In addition, it is not clear under existing law whether this is even possible. But, most importantly, to promise pensioners compensation on the basis of an uncosted policy proposal is misleading and unfair.”
Other measures highlighted by Mr Willetts today include the rolling back of means testing, restoring the link between the basic state pension and average earnings, and providing better incentives for people to save. He also promised to remove the cap of £1.5 million on an individual’s pension fund before they pay tax penalties, providing the scheme is open to all employees under the same terms.
Mr Willetts said: “We want to align the interests of bosses and workers. We don’t mind there being fat cats provided that there are fat kittens as well.”
