NAPF proposes £8,000 'foundation pension'
Share
The National Association of Pension Funds has called on the Government to create a simple state pension paying £8,000 a year, claiming it would lift two million people out of means-tested benefits.
In a report launched today, the NAPF sets out a blueprint for the UK pension system that it says builds on the Government’s 2012 reforms and ensures people will be provided with an adequate income in retirement.
The NAPF’s proposals include creating a Foundation Pension, worth £8,000 a year. This would give pensioners £25 a week in additional income and provide a solid floor on which to provide workplace pensions, according to the group.
The association wants to revitalise workplace pensions by developing new pension designs to help employers run schemes and is proposing an increase in the new statutory minimum contribution from 8 per cent to 11 per cent.
According to the NAPF, this would ensure everyone has the opportunity to receive a workplace pension worth around one third of their former earnings.
The NAPF is also calling for a permanent independent Retirement Savings Commission to “take the politics out of pensions” and a single regulator for pensions. It says this would provide clarity to scheme members and sponsors.
Chief executive Joanne Segars says: “Our proposals are designed to create a pension system which is fit for the 21st century. They increase the value of the state pension for everyone, radically reduce concerns over means-testing, and increase the value and quality of workplace pensions.
“The Government’s 2012 reforms are a major step forward and our proposals complete the task.”
Pensions expert Ros Altmann says: “We must radically reform the state pension. There is a gathering momentum in favour of this change, which is long overdue and which I have been advocating for years.
“The Pensions Commission ducked this issue, in favour of piecemeal tinkering with our current complex system. Lord Turner has already admitted he wishes he had gone further and was not bold enough. The time for tinkering is long gone.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
Readers' comments (4)
Anonymous | 29 Mar 2010 10:10 pm
in the current environment? get real.
Unsuitable or offensive? Report this comment
bill wells | 30 Mar 2010 10:24 am
I suspect the comment from anonymous 29th March is from someone who is 30 years old. It isn't from someone who has paid taxes (substantial taxes) for 40 years and simply wants a reasonable return to help fund a modest retirement. The State pension has been falling, constantly, in real terms since the 1970's and those in retirement are being abused 9that's right - abused). The government has just brought in a new 30-year rule which will allow millions of people who have made very little contribution a huge increase in the likely pension rights at retirement - many of those advantaged people will be economic immigrants who pay very little tax. Pensioners, people who fought for our country, obeyed the laws of the land, paid their taxes and received very little in return throughout their working lives are now thrown on the scrapheap and need to beg even to afford heating and food bills. Mr 30-year old, you'll be surprised just how quickly the years between now and your pension age will go by !
Unsuitable or offensive? Report this comment
Anonymous | 30 Mar 2010 11:54 am
It is essential that the barrier to private pension saving, (i.e means testing) is removed and a fair basic state pension paid to all who have contributed.
Governments can always find the money to fight wars and bail out a negligent banking system,so why not a decent starting pension for us all?
This coupled with a sensible and realistic COMPULSORY private pension fund contribution (yes, thats right NO OPT OUTS) is the way forward.
Will this happen? Based on the dithering and total incompetence of the past 13 years (remember Stakeholder pensions) probably not.
Unsuitable or offensive? Report this comment
Anonymous | 30 Mar 2010 10:17 pm
Quango's - where do they come from!!!
Govt polcy should be - contribute personally to a pension then get 20% basic rate tax relief. Tick the box this already happens.
Lets now get silly. Govt. then matches your original contribution (with no tax relief added). Company then matches the same with bottom line tax relief (already happens). But with an incentive to match the same again for every new emploee (existing included) for the first two years of that employment.
Scrap the winter fuel allowance and the pension tax credit to pay for it.
Here is to prosperity in retirement as we are all getting older fast.
AND scrap all quango's including the FSA.
There we go - scheme paid for.
Unsuitable or offensive? Report this comment