Shadow Secretary of State for Work and Pensions Philip Hammond has called upon the industry to create a sustainable pensions system and says the media has a major role to play in restoring consumer faith in pensions.
Speaking at Aon Consulting’s Pensions & Investment Journalist of the Year Awards in the Houses of Parliament yesterday, Hammond called upon the media to stop reminding consumers of past pension failures and said it was damaging consumer confidence.
Hammond said: “We must stop the damaging effect of the constant media reminders of pension failures past, before we can create a platform for pension successes future. We must do this not by stopping the media, but by addressing the causes.”
He also highlighted the need for employers to be able to arrange pension schemes which represent value for both them and their employees.
He said: “If it costs an employer £100 to provide a pension benefit (allowing properly for the risks being taken on) but the employee values it at only £80; then this is unsustainable.
“If we can get to a position where it costs the employer £100 to provide a benefit but the employee values it so highly that he is prepared to give up £110 of salary for it, then employers will be keen to provide pensions. This ought to be possible, at least for large employers, who have a much greater ability to manage risk than an individual.”