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Govt predicted to reject NPSS and reform state pension

Several leading industry experts expect the Government to reject Lord Turner’s National Pensions Savings Scheme and focus on reforming the state pension system.

Fabian Society research director Richard Brooks says a huge new entity which embodies automatic enrolment at a national level is too big a task and the Government would be reluctant to manage it.

He also claims Chancellor Gordon Brown’s pride would prevent him implementing such sweeping changes, for which the Pensions Commission would take the credit.

Brooks says: “In my opinion, the Government is sensitive because it is desper- ate to take the credit for future increases in spend- ing. You lose the credit in a tight fiscal environment.

“It is very important for the Government to say how different it is from other political parties. I doubt that we will see at this stage the adoption of the NPSS but we will see the changes to the state pension.”

Hargreaves Lansdown head of pensions research Tom McPhail claims there is little political support for the NPSS although he says an industry-run clearing house to manage funds could be feasible.

McPhail says: “A rejection of the NPSS appears to be the way that consensus is flowing at the moment. The industry could make a strong case for building an industry-led Crest-style clearing house. But Gordon Brown is more concerned with addressing the state pension ahead of anything else.”

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