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| 'Collective pensions' set to be announced in Queen's Speech | 'Collective pensions' set to be announced in Queen's Speech |
| (35 minutes later) | |
| The government is expected to unveil plans to allow pension providers in the UK to pool investments into shared funds for the first time. | |
| Under the changes - set to be unveiled in this week's Queen's Speech - workers would be able to pay into Dutch-style "collective pensions". | Under the changes - set to be unveiled in this week's Queen's Speech - workers would be able to pay into Dutch-style "collective pensions". |
| Supporters say it would boost pension payments for many, but critics say the returns are not certain. | Supporters say it would boost pension payments for many, but critics say the returns are not certain. |
| Pensions minister Steve Webb said the move would give people "better value". | Pensions minister Steve Webb said the move would give people "better value". |
| Under the changes, which could be introduced by 2016, workers would be able to pay into funds shared with potentially thousands of other members. | Under the changes, which could be introduced by 2016, workers would be able to pay into funds shared with potentially thousands of other members. |
| BBC political correspondent Ross Hawkins said sources had suggested a pensions bill expected to be announced in the Queen's Speech would allow the schemes to be used in the UK. | BBC political correspondent Ross Hawkins said sources had suggested a pensions bill expected to be announced in the Queen's Speech would allow the schemes to be used in the UK. |
| He added there was "a growing political consensus behind the idea". | He added there was "a growing political consensus behind the idea". |
| Supporters of the schemes say they provide a better investment than individual workplace pensions because they are less vulnerable to variations in the stock markets. | Supporters of the schemes say they provide a better investment than individual workplace pensions because they are less vulnerable to variations in the stock markets. |
| The Netherlands | The Netherlands |
| Pensions minister Mr Webb told The Sunday Telegraph that the key advantage was "pooling risk" of investments performing worse than expected across large numbers of people of different ages. | Pensions minister Mr Webb told The Sunday Telegraph that the key advantage was "pooling risk" of investments performing worse than expected across large numbers of people of different ages. |
| "It gives people greater certainty and probably better value," he said. | "It gives people greater certainty and probably better value," he said. |
| "There are some quite strong claims made for how much better it is. People say you will get a 30% bigger pension. | "There are some quite strong claims made for how much better it is. People say you will get a 30% bigger pension. |
| "You might, you might not, but clearly it is pretty unambiguous that you will get a more certain outcome and potentially a better one." | "You might, you might not, but clearly it is pretty unambiguous that you will get a more certain outcome and potentially a better one." |
| But critics of the model have warned that, unlike a fixed annuity, pensioners only have a target for what they will receive in retirement - rather than a guarantee. | But critics of the model have warned that, unlike a fixed annuity, pensioners only have a target for what they will receive in retirement - rather than a guarantee. |
| If the collective fund's investments fail to generate the predicted profits, pensioners could see their incomes fall in some cases. | If the collective fund's investments fail to generate the predicted profits, pensioners could see their incomes fall in some cases. |
| The plan is based on schemes which are already operating in the Netherlands and Scandinavia. | The plan is based on schemes which are already operating in the Netherlands and Scandinavia. |
| However, Dutch politician parties have recently called for collective pensions to be scrapped in favour of British-style individual pensions. | However, Dutch politician parties have recently called for collective pensions to be scrapped in favour of British-style individual pensions. |
| The Queen's Speech, to be delivered on Wednesday, will set out the government's final legislative programme before the 2015 general election. | The Queen's Speech, to be delivered on Wednesday, will set out the government's final legislative programme before the 2015 general election. |