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Ukip eyes radical overhaul of state pensions

Ukip is considering radical plans to overhaul the state pension in its general election manifesto.

Newly appointed Ukip economic spokesman Steven Woolfe is pushing for the state pension to be replaced with a private system in the party’s 2015 general election manifesto.

The plans have not been approved by the party but are under consideration ahead of their 2015 general election manifesto.

Firstly, Woolfe wants all children receive a £2,000 Government grant at birth which is then invested by fund managers. Individuals and employers would also be forced to make contributions for a minimum 35-year period.

Secondly, the Government should fund a National Pension Company to pay for a minimum pension provision. The set-up would be similar to the sovereign wealth fund approach operated in Norway.

The Government would contribute a minimum of £1bn a year. If a person dies or moves abroad before they are 25 their private pension pot will be moved into the National Pensions Company.

Thirdly, savers will be able to draw down money for specific life events such as buying a house for their children or health issues.

Annuities would be optional and if the product is not bought then the remaining pot could be bequeathed to children.

Woolfe says: “This is a long-term plan. My idea is to move our country to a personal pension pot for individuals. There are issues with competition between fund managers but we can deal with that.”

But pension experts have criticised the plans as “incoherent”.

Think tank Strategic Society Centre director James Lloyd says: “This would take hundreds of years of strict public finances to have an impact. It is bizarre Ukip could be going after the state pension when its core voters are pensioners.”

Hargreaves Lansdown head of pensions research Tom McPhail says: “There is nothing like a coherent and well-thought through retirement policy; and this is nothing like a coherent pensions policy.”

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. I’ve just read a superb, coherent and costed policy proposal…………………….. and this wasn’t it. (acknowledgement to Groucho Marx)

  2. Crack-pot maybe but innovative or ‘blue sky’ even to talk about it regardless of what impact it may have on one’s supporters’ voting patterns! Must be careful to ensure those first to criticise are not doing so just to ridicule for ulterior motive…. incidentally, I could – as I was a Conservative PPC but I shan’t!

    I suggested to Gordon Brown at the depth of the crisis (2009) that stabilizing the home markets by launching the first tranche of Government backed National Pension Fund by a special long-dated Gilt issue (even some in Euros as the opportunity was excellent) at the stupidly-low rates of interest (becoming even cheaper we know) and buying All share index trackers would have been wise – the progress of the ‘economy’ as reflected by equities is the only way future pensions can be paid after all. Guess what? No action….

    Who’s brave enough to consider tackling the issue whilst there is still time – as I otherwise don’t want to find in several years that my State Pension doesn’t exist as they’ve all become means tested as the only way of affording them as universal benefits…

  3. If it works for the Norwegians than it really isnt “not well thought out” or “incoherent” as its already working. Frankly i would rather listen to Norways Pension experts than our so called Pension “experts” who continue to make bad decisions. Norway tend to get most things right!!

  4. A Sovereign Wealth Fund is not such a bad idea. But the rest seems a bit flaky. A sovereign Wealth fund might work if all profits from (say) North Sea Oil and Fracking were paid into it. How do you think Norway built up their fund? It was from oil revenues, that we have been squandering for the last 30 years.

  5. … add to that Harry that despite this apparent squandering, we’ve still also run up a pretty sizeable overdraft too.

  6. Julian Stevens 7th March 2014 at 9:42 am

    What about picking up the traces of the Conservative party’s pre-election manifesto pledge ~ about which it’s since done absolutely nothing ~ to sort out the tangled mess of the private pensions framework brought about by 25 years of prejudicial government meddling?

    I’d have thought it could be a pretty good vote winner to say to voters: The Conservatives said they’d do it but haven’t. We WILL do it.

  7. What a fantastic idea – but it clearly needs fleshing out for completeness!

    We need more creative thinking like this and to learn from other countries such as Norway, Australia, Canada etc….

    The issue is the government has a major problem funding pensions and it is getting bigger by the day. Auto-enrolment will help but is not sufficient to fully address the issue and this idea is the first I have seen from any political party as typically they are not willing to make difficult choices!

    We need a plan, including a transition plan, that is agreed by all parties and not allowed to be changed by future governments to get us out of the mess we are in and ensure that our future pensioners are able to have access to a fund that allows them to live in the comfort that they require and deserve. Also, allowing access to this fund for house purchase and other relevant requirements will help overcome the current difficulties in obtaining a mortgage due to a lack of deposit.

    Our politicians need to focus more on people outcomes and not just their own!

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