10 NOVEMBER 2001, Page 48

Savers beware!

From Mr Gordon Lishmun Sir: Simon Nixon decries the life-insurance industry for its failures on pensions (Tensions? I'm not buying one', 20 October). Political parties should take care that in the future we do not point the finger at them.

As Mr Nixon points out, take-up of the stakeholder pension is disappointing among its target audience of lower earners. This may be because they are wary of the pensions industry; it may also be that they are spotting another potential mis-selling scandal — this time on the part of the government.

Means-tested income support for pensioners, because it is linked to earnings, is rising faster in value than the RPI-linked basic state pension. It does not take much expertise to work out that younger people need to save more to enjoy the same level of pension as previous generations. and that some who save may not achieve a much higher income in retirement than if they claimed income support.

The potential mis-selling scandal lies in the number of lowand middle-earners who may be persuaded to buy into stakeholder, only to find out on retirement that, as a result of their saving, they have narrowly disqualified themselves from means-tested benefits or the forthcoming pension credit.

This is not the responsibility of the government alone. All the political parties have a duty to move towards consensus on the terms of a new retirement settlement and to ensure that those terms are clear and acceptable to the population as a whole. People should be able to save enough for retirement without feeling at the end of the day that they have been taken for a ride, whether by the life-insurance industry or by the state.

Gordon Lishman

Director General, Age Concern England, London SW16