26 February 2010
Pension experts have called on the Government to revamp the
state pension around a "citizen's pension" which would give the
same level of pension to all.
Legal & General's wealth policy director Adrian Boulding
said a combination of the basic state pension, state second pension
and pension credit schemes were convincing many that state pension
provision on its own would be enough for retirement. He said: "The
Government should be bold and go for a citizen's pension. They
should sweep away this mess we have of a basic state pension that
you have to earn over so many years and a state second pension that
is fiendishly complicated and then a means-tested pension
top-up.
"If everybody knew they were going to get the same £120 or
whatever, I think everything else we are trying to do would fly.
The National Employment Saving Trust would fly and auto-enrolment
would fly because people would see that the basic pension is not
enough and they would be clamouring for more. It would get us away
from this confusion that the state will see them all right."
Hargreaves Lansdown's head of pensions research Tom McPhail
added: "The state pension is the foundation of the pension system
and the reason we have so many problems today is because they have
not fixed the foundations. Anything the Government does which is
not focused on simplifying the state pension is not addressing the
problem. They have to start there. If we get a workable Tory
majority, the imperative is to be bold and go for that in the first
term. It might take a while but they need to at least put in place
a process that will get us there quickly so that everybody can see
from there on in that whatever you save is yours."
The Liberal Democrats had proposed a similar pension based on
residency before deciding that such a policy was currently
unaffordable. See TPAS news item dated 11th January 2010.
