Dated: 6 April 2011
Having examined in detail the Government’s proposals for the State Pension which were published on Monday, the Institute of Directors is concerned about some of the approaches to reform under consideration.
Commenting, Malcolm Small, Senior Adviser on Pensions Policy at the IoD said:
“On further examination of the Government proposals, we’re baffled as to why two options for reform are included. The first, to gently accelerate the reforms already in train, does not meet the Government’s own assessment against the principles it has laid out for reform of simplicity, clarity and fairness. It would do little for women’s pensions and would effectively preserve elements of the existing architecture, such as savings credit, far into the future.
“The policy community has long been united behind the more “radical” option 2, which would deliver greater simplicity and better overall outcomes, much sooner. So, we are baffled as to why it was felt necessary to include option 1 at all.
“There is some danger of the Government getting itself tied up in knots around transitional arrangements for those with accrued State Second Pension rights, which look potentially fiendishly complex, in trying to be fair to everyone. There will be winners and losers in this – but the vast majority will be winners, and simplicity of approach must be the watchword here if people are to have the clearest idea of what they will get from the state overall. Despite this, option 2 remains our desired outcome. Only it will deliver a clear basis on which further saving is to the clear advantage of all who undertake it.”
To see the Government’s proposals, go to: A state pension for the 21st century – public consultation
