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Stakeholder Pensions Failure
Stakeholder pensions refer to low cost and affordable pensions which are aimed at millions of people across the United States who presently do not have the right options available to save sufficient money for their retirement. |
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Stakeholder pensions are very common in the United Kingdom. In fact, in the U.K., stakeholder pensions are available from April 2001 and the main users of stakeholder pensions are those in the low income group. However, many higher earning people and even non-earners are showing interest in stakeholder pensions.
However, many consider stakeholder pensions a failure. Many organizations helping low income family feel that stakeholder pensions have failed to attract the target group as many low income families are not making significant savings. These organizations have blamed the government approach to the stakeholder pensions. According to these organizations the government is concentrating more on giving means-tested benefits rather than providing a decent pension. In addition, employers are not forced to contribute to stakeholder pensions, thus leaving the entire burden of building up a decent pension on the employee.
Organizations like National Consumer Council feel that government should take an initiative to bridge the pension gap that is presently prevailing and should look to provide adequate and secure pension where everyone receives the same basic amount immaterial of their work record. National Consumer Council also said that many people do not trust the pension providers which include the government, employers and the pension industry. Hence, people are reluctant to save.
Organizations like Association of Retired and Persons Over 50 said that they were not surprised that stakeholder pensions were a big failure. They opined that the government should be looking to introduce a universal state pension linked to average earnings and pensions should have add-on contributions were additional voluntary contributions to the pension plan would enhance the pension.
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