Session 2002-03 11 April 2003
- The Future of UK Pensions -
The Work and Pensions Select Committee today publishes its Report into the Future of UK Pensions.
Our Report concludes that UK pension provision is at a turning point and that there are some key choices to be made to achieve a system in which individuals are enabled to make private pension choices in the knowledge that they have an adequate state pension as a sustainable foundation.
The Report identifies a number of strengths and weaknesses with the system of pension provision in the UK. The Report calls upon the Government to announce as soon as is practicable how it proposes to improve security of private pension schemes, including those provided by employers without imposing further burdens on pension providers.
The Report does not accept the current case for compulsory savings, but calls upon the Government to look closely at other ways of increasing savings, such as requiring individuals to opt out of prescribed savings (instead of opting in), and to consider allowing employers to make membership of their occupational pension schemes a condition of employment.
The Report recommends that the Government helps individuals to understand the appropriate level of savings required to achieve their desired level of pension at a particular date. It also recommends that the responsibility for marketing and education of pensions be transferred from the Financial Services Authority to the proposed new pensions regulator.
On state pensions, the Report considers the case for and against continuing with the current system and an alternative option which involves raising the level of state pensions. A range of possible financing options is also considered, including raising the state pension age. The Committee does not accept the case for increasing the state pension age above 65 now, but calls upon the pensions commission, which is chaired by Adair Turner, to investigate the long-term stability of the current pension policy and alternative options.
The Chairman of the Committee, Sir Archy Kirkwood MP, said “We hope that this Report and its two volumes of supporting evidence will help the search for a lasting consensus on pension provision. We wish to see a future in which individuals are encouraged to plan sensibly and confidently for their pensions in the knowledge that they have an adequate state pension as a sustainable foundation.”