Aon Consulting welcomes Government's decision to lower Personal Accounts contribution cap

Paul McGlone, head of employer advice at leading pension, benefits and HR consulting firm Aon Consulting, said:

The government's decision is extremely sensible and shows commitment towards ensuring that the Personal Accounts system is focused and effective in its purpose. With a lower contribution cap, Personal Accounts will target pension provision to those people who would never have had it. A higher contribution cap would have run the risk of broadening the target market to more of a national scheme, potentially causing damage to existing employer schemes.

Of course, it is also important to note that todayís proposals for the contribution cap is not set in stone. Once Personal Accounts is up and running, we would expect contribution levels will be reviewed on a regular basis to ensure they are effective. However, as a starting point it is encouraging to see that the government has listened to the industry and that the scheme is now headed in the right direction. Industry support and cooperation will be vital in getting the scheme off the ground, and this demonstration of how the industryís views have been taken on board, will certainly win the government brownie points.