Personal Accounts: Target Market PADA

The Target Market for Personal Accounts is Low and Moderate earners.

It is the job of The Personal Accounts Delivery Authority (PADA) to propose the most suitable product structure and method for communicating the benefits to this demographic.

Concerns have also been raised about the risks to existing more generous pension schemes. Critics argue that employers will see Personal Accounts as an excuse to reduce payments to pensions. Some estimates are that as much as 50% of existing saving may switch to personal accounts.

The Conservatives have also asked for clarification on the future of means testing, arguing that low earners would be better off opting out of the scheme altogether. Auto enrolment has to be for greater good but certain low earners could be financially worse off. 

Generic advice should help but there is unlikely to be scope for individual advice. This should help protect the existing pension market and an exempt scheme test will be introduced so employers will know their scheme is exempt. Initial thoughts are that premiums will have to at least equal thos proposed for Personal Accounts for a scheme to be exempt. See our section options for employers for more details.