BRITAIN’S leading pensions organisation will put pressure on the Government to scrap the proposed National Pensions Savings Scheme (NPSS) and let the private sector run a low-cost savings system, The Times has learnt.

The Association of British Insurers will present the Government next week with a plan in which low and middle-income workers would be enrolled automatically in savings schemes operated by insurers. Employers would be compelled to match contributions into workers’ savings accounts. But the money would not be collected via PAYE, as proposed by the Pensions Commission.

The commission suggested last November that the Government run the NPSS, but after protests that the scheme would kill private savings and company pension funds, Stephen Timms, the Pensions Minister, told insurers to propose an alternative.

An ABI spokesman said that the commission’s suggestions could be “matched up with the infrastructure that already exists and the experience in the industry about how to run individual pension schemes and get economies of scale”.

The National Association of Pension Funds is also expected to suggest that the private sector be allowed to come up with its own savings schemes. Christine Farnish, NAPF chief executive, would not be drawn on whether the market solution should come from employers or insurers.

The Association of Consulting Actuaries also voiced its concern over the NPSS yesterday. Instead, there should be better incentives for companies to share the risk of providing a pension.

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