Scrapping personal pension accounts 'would be a backwards step'

The government's proposed personal accounts system could still provide pensions to a number of UK workers, according to the Trades Union Congress (TUC).

The independent policy advisor Dr Ros Altmann recently highlighted a number of potential problems with the development of personal accounts, with the expert calling for a reform of pension annuities.

Responding to Dr Altmann's concerns, TUC General Secretary Brendan Barber believes that while personal account proposals may not be perfect, it is important they are improved rather than scrapped.

He said: "Scrapping the new duty on employers to contribute to the pensions of their staff would be a huge step backwards, and leave millions unpensioned.

"The challenge is to make it better, not to tear it up and start again."

Dr Altmann suggested that if the personal accounts system is to go ahead, more attention needs to be given to how annuities could provide people with an income from their pension savings.

Written by David Shuker.