Social Market Foundation comment on Pensions White Paper

Commenting on some of the proposals in the Pensions White Paper published today, Social Market Foundation Director, Ann Rossiter said:

ìBy rejecting compulsory pensions in favour of auto-enrolment the Government has missed the opportunity to save the 19bn in tax currently spent incentivising savings.

These savings could instead be targeted at low income earners, carers and women and used to minimise the burden of compulsion on small and medium sized businesses.î

A recent publication by the Social Market Foundation recommends the following:

A non-contributory, universal Citizenís Pension, indexed to earnings and based on residency.

A compulsory contribution of 10% - split 50:50 by employers and employees ñ on income between 5,930 and 25,000. The burden of compulsion on employees and employers should be offset by a universal, flat-rate Government Contribution of 500.

Access to compulsory savings is available 10 years before the official state pension age.

A more liberal extended-ISA savings regime providing flexibility and choice over voluntary savings

The SMF broadly welcomes the proposals in the Pensions White Paper as a step towards a fairer, more equitable and sustainable pension system in the UK but believe that only compulsory pension savings, complimented by a higher state pension, can credibly achieve the objectives of higher pensions and better pension coverage.

To arrange an interview or for further comment please contact Jo Saunders on 020 7227 4402 or out of hours on 07896129724.