View more on these topics

Pickering calls for a 40% pension and public exit from private plans

The state should pay a basic pension of 40 per cent of average earnings from age 68 but should have no role in the design of private pension products, says the Adam Smith Institute.

The right-wing thinktank says a substantial state pension would remove the need for today&#39s heavy and expensive regulation of private pensions, transforming private provision from its present role of surrogate privatised welfare to that of marketplace product. The UK&#39s current basic state pension is equivalent to around 15 per cent of national earnings, up to 20 per cent with means-tested benefits.

The report, by Watson Wyatt partner Alan Pickering, who headed the Government review of pensions, calls for a change to offer access to the workplace to individuals, regardless of age, arguing that changes in savings patterns alone are not a sustainable response to increased longevity.

The report describes the Inland Revenue&#39s simplification plan as offering a “genuine incentive” to new pension saving because of the increased maximum tax-free cash. But it argues that if further tax incentives are to be offered, they should be aimed at employers which contribute into work-based schemes rather than direct to staff.

The report says the problem with the UK state pension system is that it is not generous enough rather than too generous, as is the case with many other developed countries. It calls for a dramatic increase in the basic rate of the state pension. By 2008, the basic and second state pensions should be amalgamated and contracting out abolished.

Pickering says: “No longer can we afford to pension off workers in their prime. Encouraging training and allowing older people to remain economically active will not only benefit them but will also make it easier to plug the retirement gap.”


CTF is complaint waiting to happen

Ever since the child trust fund was announced, I have been trying to work out how my business can afford to take any profitable interest in this new product and Government benefit. I now conclude that, irrespective of the lack of any real prospect of sufficient remuneration to make it worthwhile, this is a future […]

NU caps lifetime penalty

Norwich Union is capping the early redemption charges on its lifetime mortgage, bowing to pressure from IFAs and mortgage brokers. The product was criticised last year by IFAs who said the uncapped mark-to-market ERCs were unacceptable because they are linked to long-term gilt yields so if interest rates go down, the ERC could exceed the […]

Baby talk

Sometimes the constant stream of press releases about new appointments can get a little repetitive so the Diary was pleased to get one release that stood out from the crowd. Whitehall Financial Independent proudly announced the arrival of new adviser John Dunseath – and his four-month-old twins. “The babies were born in October and I […]

CML calls Miles a sensible package of measures

The CML has welcomed the final Miles Review looking at the potential for a long-term fixed rate mortgages, calling it a sensible package of measures that would generate improvements in the UK mortgage market. The trade body says there is a strong interaction between some of the measures Miles has proposed and the work the […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm