Azara Blog: Adair Turner publishes pensions report

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Date published: 2005/11/30

The BBC says:

A gradual rise in the state pension age to 68 has been put forward as part of a major proposed shake-up of UK pensions.

In return, the basic state pension would be increased and rise in line with earnings rather than inflation.

In its report the Pensions Commission also proposes a National Pension Savings Scheme, which many workers would be automatically enrolled into.

The report has triggered a political row over who caused the pensions crisis and whether the reforms are affordable.
...
The head of the Pensions Commission, Lord Adair Turner, said the UK's pension system currently faced "significant problems".

The commission spent three years looking at ways to revamp the UK's pension system.

In its interim report last year, the commission said more than 12 million people over the age of 25 were not saving enough towards their retirement.

The commission has now called for the state pension to become more generous, but become payable at a later age over the coming decades as life expectancy increases.

It suggests that the state pension age should rise gradually, to 66 by 2030, 67 by 2040 and 68 by 2050.

It also proposes:

"The problems in the UK's pension system will grow increasingly worse unless a new pensions settlement for the 21st century is now debated, agreed and put in place," Lord Turner said.

The proposal to link increases in the basic state pension to earnings has already caused a political row. Chancellor Gordon Brown was reported to have said it was unaffordable.

Alison O'Connell from the Pensions Policy Institute told the BBC that people who had studied pensions recognised that it "would be much better to have a better state pension and less means testing".

"As we're all living longer, that will require some change in state pension age in future to pay for it," she added.

"The big question is how much we spend on state pensions and how much we can reduce that cost by raising the state pension age."

All very eminently sensible (and much as expected), which almost certainly means the government will ignore many of the recommendations. Alison O'Connell says that "people who had studied pensions recognised that it 'would be much better to have a better state pension and less means testing'" but unfortunately she is leaving out the one person who believes the opposite, Gordon Brown. He has a fetish for means testing (in particular of old people) and he's hardly going to admit now that he was wrong all along about pensions. So until Gordon Brown and New Labour are removed from office, expect no sensible progress on pensions.

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