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.”