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Suggestion box to boost savings plan

Pensions minister calls for thinktank contributions

The Government says it would welcome research and suggestions on how savings initiatives such as Isas, child trust funds and the savings gateway can help with its pension reforms.

Speaking at an IPPR event sponsored by Fidelity, pensions minister James Purnell said work needed to be done to create a single saving approach and the Pensions Commission shows good ideas can be found outside of the Government.

The Treasury has pledged an Isa review this year and Pima is among those calling for the Government to use this review to look at integration.

Purnell reaffirmed the White Paper commitment to re-auto-enrol opt-outs every three years or when they move jobs, although he said other issues were still up for debate.

He said he still had an open mind over the charging structure and whether there should be a flat fee, a percentage fee or a combination. The Government would consider if the age 22 starting point should be lowered and whether to introduce staff pledges to increase contributions as wages rise.

Purnell added that the Government must not run away from concerns such as whether auto-enrolment will work, how much means-testing will be reduced and if there will be moving down.

The speech, focusing on getting young people to save, highlighted that since 2000 the proportion of 20-29-year-olds contributing to a personal pension has fallen from one in three to one in four, with other groups remaining static.

He said young people need to grasp the need to save more for retirement to avoid being the “live fast, die poor” generation. Purnell said: “There is work to be done about creating a single saving approach across Government. Sometimes it is better if this work is done by people outside the Government.”

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