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McAteer wants to end 21bn ‘waste’ with compulsion

The 21bn cost of pension tax relief in 2004/05 prov- ides a compelling argument for compulsion, claims consumer watchdog Which?

Statistics from the Pensions Policy Institute show that the 21bn pension tax relief represents 1.8 per cent of GDP.

Which? principal policy adviser Mick McAteer says this is an unforgivable waste of money and huge sums could be saved by introducing compulsion with the Government able to cut tax relief substantially. This would be positioned alongside a centrally administered pension scheme.

McAteer says: “Spending this amount of money to encourage people to save is irresponsible. This is compelling evidence that compulsion will save a huge amount of money.”

The PPI report also reveals that over five million people do not qualify for state pensions. PPI spokesman Chris Curry says the figures undermine the widespread assumption that the basic state pension is universal. He says: “It is disturbing to see how many people do not qualify for state pensions. It is also clear that there is a long way to go before take-up of pension credit reaches the number of people who are entitled to it.”

By May, only 44 per cent of people entitled to pension credit had claimed it.

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