Pensions reforms in Budget - Full NAPF Reaction
23 March 2011
The National Association of Pension Funds (NAPF) reacted to Budget announcements on the state pension, public sector pensions and the state pension age.
On Public sector pensions Joanne Segars said:
"It is encouraging that the Government has formally accepted Hutton’s report and has pledged not to cherry-pick from it. But it should think carefully about how and when it increases employee contributions into pensions.
"Public sector workers are facing uncertainty about jobs and pay, and a significant hike in contributions could spur many to quit their pensions.
"Pushing people out of their pensions will only deepen the UK’s looming retirement crisis. And if opt-outs are high the Government might not generate
as much money as they expect from pension contributions.
"A decision about contribution levels should only be made alongside the wider-ranging, future reforms which will follow the Hutton report."
On State pension reform, NAPF Chief Executive Joanne Segars said:
"This is a turning point for pensions in the UK. Over half a million new pensioners a year will get a simpler and more generous state pension, and reliance on means-tested benefits will be slashed.
“For too long we have put up with one of the most complicated and meanest state pensions in Europe.
“This reform provides a clearer foundation for saving for old age. For the first time in a generation, people will know that it pays to save.
"The NAPF has been at the forefront of fighting for a better state pension system. This is a massive step forward for a cornerstone of the welfare state, and also helps those saving into a workplace pension to plan their retirement more clearly.”
The NAPF proposed its simpler, more generous ‘Foundation Pension’ in March 2010. A foundation pension will radically simplify the state pension system by combining the basic and state second pension into a single pension above the level of means-tested benefits. This will ensure that people can save for their retirement with the confidence that they will not have their savings eroded by means-tested benefits.
On the State pension age, Joanne Segars said:
“As people live longer, increases in the State Pension Age are a must. But they need to be handled fairly.
“As long as people are given enough time to plan for their retirement, making future changes to the State Pension Age more automatic, alongside independent reviews of longevity, seems a sensible way to proceed.
“But any new mechanism needs to handle future increases more fairly than the rise to 66 already proposed. 330,000 women in their late 50s will be particularly affected, experiencing an increase by as much as two years with little time to plan.”
Notes to Editors
1. Joanne Segars is available for interview.
2. The NAPF is the leading voice of workplace pensions in the UK. We
speak for 1,200 pension schemes with some 15 million members and assets of around £800 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.
Contacts:
Paul Platt, Head of Media, NAPF, 020 7601 1717 or 07917 506 683, [email protected]
Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]