Employers resist citizens’ pension proposals
The CBI has rejected calls for a flat rate citizens’ pension for all, claiming such a scheme would be prohibitively expensive.
Publishing its response to the Turner review on the pensions crisis, the employers’ organisation warned that a flat-rate, non-means-tested state pension was unrealistic.
Instead of a higher pension, paid to all regardless of working history, the CBI believes the real challenge is to deliver a simpler system that will support those on below average earnings who are not able to save enough for their own retirement.
CBI director-general Sir Digby Jones commented: “A much larger state pension is unnecessary for everyone and frankly the country can’t afford it.
“The real challenge is to encourage those who can afford to save more for themselves, and to provide more support for those on lower earnings who will struggle to save enough for an adequate pension.”
He added: “That means keeping a meaningful, earnings related, state second tier pension to provide for those who cannot access or afford a private pension scheme.”
An interim report published last year by the Turner pensions commission explained that in order to solve the pensions crisis either the average retirement age must be raised, savings increased or taxes pushed up.
A number of groups, including the SNP, trade unions and pensioners groups are calling for a higher, simplified, pension for all.
