Aegon proposes means-testing answer
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Aegon is calling for the eligibility threshold for auto-enrolment to be doubled from earnings of £5,035 to around £10,000 and those over 55 to be exempt in a bid to tackle the means-testing issue.
The firm wants a new Government to enact these changes in its first 100 days in office.
In a new pensions manifesto, released today, Aegon says auto-enrolment should trigger when people earn around double the current threshold of £5,035.
This would prevent three million of the very lowest earners facing the means-testing trap and also cut down the admin cost for the National Employment Savings Trust, according to the firm.
Aegon also wants the upper age limit for auto-enrolment to be reduced to 55, although older workers should be free to opt into the scheme.
It says the legislation as it stands risks auto-enrolling people who are approaching retirement with little or no existing private saving but those with less than 10 years left in the workforce would be unlikely to save enough to take them clear of means-testing.
In its manifesto, aimed at influencing the major political parties’ pensions policies, Aegon calls for businesses with fewer than five employees to be exempt from pension reform to reduce the burden on small businesses and make the rules cheaper for the Pensions Regulator to enforce.
Chief executive Otto Thoresen (pictured) says: “Pensions policy is more important now than at any time before due to the presses on the economy from an ageing population.
“This means making sure investment in providing for older people is made as efficiently as possible and shaping policy so it tackles the barriers to businesses, individuals and the public purse all paying a fair share.”
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Readers' comments (1)
Manchester Cynic | 22 Apr 2010 3:43 pm
Why not simply take the benefits from NEST out of the assessment for means tested benefits altogether? If NEST benefits are what make the difference to the means testing, then you probably really need the benefits , and the amount you have in NEST will probably be pretty small. If your means are such that you don't qualify for means tested benefits, then it doesn't make any difference anyway. Voila - a simple and cost free way of sorting out this knotty problem.
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