Millions of pensioners will continue to have an unacceptably low quality of
life without changes in the Governmentís pension policy, warns the UKís leading campaigning body on work issues.
According to The Work Foundation, formerly The Industrial Society, the Government should admit that its strategy for pensions is mistaken, and needs a drastic rethink.
In itís latest current affairs paper, Resolving the Pensions Dilemma, The Work Foundation argues that we need a higher level of basic State provision, and a different sort of partnership between State and non-state providers, with an end to the morass of contracting out.
The Work Foundation recommends:
- A drastic re-think of Government pension policy. If this simplifies and restores confidence in the private pensions system it is likely to improve take-up.
- The resources to be spent on the Pension Credit should instead be spent on increasing the State basic pension and linking it to earnings.
- A genuine partnership of state, employer and individuals to deliver economies of scale through a combination of voluntary effort and legislation. This would take effect in a programme of standardising benefits, communication and administration.
- Contracting-out should be abolished, at the same time as Phase 2 of the State Second Pension is brought in (probably 2006-7) with a corresponding adjustment in NI contributions.
- Tax relief, which disproportionately benefits the higher-paid, should be altered to provide a tax subsidy for the lower-paid who contribute to non-state pensions.