‘Politician proof’ pensions, say Lib Dems
The pensions system should be “politician-proofed” through the creation of a new independent pensions body, say the Liberal Democrats.
An Independent Pensions Authority would be created to advise on issues such as retirement ages, under a 10-point plan for pensions unveiled by the party today.
The Lib Dems maintain that the British pensions system is an ineffective incoherent muddle, and needs radical change if things are to improve.
Their recommendations include scrapping means-testing, and providing incentives for people to save privately.
Other politician-proofing measures include creating a greater cross-party consensus on pensions, and a system where the majority of people had their own second pensions to rely on, rather than being dependent on the state.
Liberal Democrat leader Charles Kennedy said: “Millions of our pensioners still live in poverty, many women end up with insultingly small pensions, and the system is now so complex that few people can understand it.”
“Means-testing has helped create a pensions system which is in a complete muddle – both complex and ineffective,” he added.
The 10-point plan also includes proposals for a Citizens’ Pension available to all, simple to understand and based on residency and not national insurance contributions.
The party does not agree with the idea of compulsory pensions contributions, beyond the tax that already goes to fund the state pension, but proposes measures to create a “revitalised voluntarism”.
These include the introduction of an annual pension projection for each citizen, making occupational schemes ‘opt out’ rather than ‘opt in’, and helping people draw down housing wealth during their retirement.
The party also said it would investigate providing a Government-guaranteed, low-cost, pension product run by National Savings, in place of the State Second Pension and look into introducing a Britsaver product – a defined contribution, low cost, employer supported saving scheme, which employees can be automatically opted in to, with encouragement to help younger people to save.
The Lib Dems also propose an overhaul of pension taxation to increase fairness and transparency.
“We cannot afford any further dithering and delay on fundamental pensions reform,” concluded Mr Kennedy.
