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LibDems switch to earnings- linked pension rise

The LibDems have revised their pension policy with a switch from increases linked to earnings rather than prices.

The revised proposals for pension reform include raising the state pension age to 67 to help pay for extending their citizen’s pension to all pensioners rather than just people over 75. The LibDems would also scrap the state second pension.

The changes mars a move away from their manifesto, which proposed a citizen’s pension only for those over 75, with the gradual implementation for other pensioners depending on affordability.

They had also previously called for pension rises to be linked to prices rather than earnings, suggesting that using earnings was unaffordable.

The LibDems support Tur- ner’s leaked proposal for a centrally administered Britsaver national pension savings scheme, with all employees enrolled automatically. They suggest it would be a low-cost defined-contribution scheme with a choice of funds, including a low-risk option run by National Savings & Investments.

The proposals reaffirm the LibDems’ commitment to estab- lish a national network of financial advice centres, based on organisations such as the Citizen’s Advice Bureau to give middle and lower-earners advice on debt, savings and pensions.

The party wants pension tax relief to be simplified to ensure it is distributed more fairly.

LibDem leader Charles Kennedy will call on MPs to take a lead on reforming public-sector pensions by showing a willingness to reform their own scheme.

LibDem Shadow Work and Pension Secretary David Laws says: “Our proposals will res- ult in a simpler, fairer and better state pension system and will boost private saving.”

Conservative Shadow Work and Pension Secretary Malcolm Rifkind says: “The Turner report deserves careful study and a considered response, not this sort of pre-emption and inconsistency from the LibDems.”


Bee says Turner’s scheme fails FSA’s suitability test

Adair Turner’s National Pension Saving Scheme goes against the FSA’s suitability requirements, says Scottish Life head of pension strategy Steve Bee. He says the scheme presumes the pension is a suitable investment without allowing for advice to be given and leaves uncertainty over where liability lies. He says the FSA told the Treasury select committee […]

Portman closes four branches

Portman is closing four branches as part of its annual review of the branch network due to a decline in usage and failure to improve sales performance over the last year.The branches to close are in Devon, West Sussex and Wiltshire while five other branches that were under review will be retained. There will be […]

Correspondent’s week

This week by John Greenwood, deputy personal finance editor of the Sunday Telegraph

Vantage point

Ben Yearsley Investment manager, Hargreaves Lansdown, Bristol


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