NAPF reacts to Comprehensive Spending Review
20 October 2010
The National Association of Pension Funds, the UK’s leading voice of workplace pensions, today reacted to the Comprehensive Spending Review.
Joanne Segars, NAPF Chief Executive, said:
“This was a difficult but bold review which touched on some key issues like the state pension age and public sector pensions.
“Pensions, like all other parts of the economy, will play a part in plugging the spending gap. But the Government must strengthen its commitment to supporting good quality workplace pensions.”
STATE PENSION AGE RISE
Ms Segars said:
“Increases in the state pension age are inevitable, but they must be handled fairly. People need time to plan and adapt.
“These changes will have a particular impact on women, especially those in their late 50s, who may have to review their retirement plans.
“The trade-off for a later retirement must be a better state pension, particularly as the UK’s is the worst in Europe.
“The confirmation of the ‘triple lock’ guarantee is welcome but we need deeper reform, and a simpler and more generous foundation state pension.
“The NAPF’s proposals for a new, universal Foundation Pension of £8,000 a year from 2017 are affordable and fair. The Government must act swiftly to bring this about.”
PUBLIC SECTOR PENSIONS
Ms Segars said:
“There is a strong case for increasing staff contributions, but the lower paid must not be priced out of their pensions.
“We are glad that the Government recognises this, and that it agrees public sector pensions must remain good quality. This must not become a race to the bottom to see who can offer the worst pension.
“Any hike in contributions must be gradually phased in, with low income workers protected to minimise opt-out rates from pensions.”
NEST (National Employment Savings Trust 2012)
Ms Segars said:
“NEST will play a crucial and long overdue role in widening pension provision. So we are pleased the Chancellor confirmed the establishment of NEST. But we await clarification on the scope of auto-enrolment, and the Government must state its plans as soon as possible.”
SOCIAL HOUSING
Ms Segars said:
“Many pension funds are already looking into social housing as an option for long-term investment. By raising some social housing rents, the Government may encourage more pension funds to invest in new affordable housing projects.”
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