UK – The Conservative Party has attacked the Labour government’s handling of the UK pensions crisis and proposes a reform of annuities, and a reduction in the red tape on pension funds.
At the Conservative Party conference, David Willets MP, the party’s pensions spokesman, highlighted the fact that pensioners over the age of 75 have an average income £80 less than younger pensioners. At the moment pensions savings must be converted into annual income at the age of 75, but Willetts suggest that this should be changed so that pensioners are free to decide what to do with their own savings.
In a similar vein to the NAPF’s complaints made yesterday about the complexity of the current UK pensions system, Willets criticised the reams of regulations that the Labour government has set up. The complexities are discouraging companies from establishing and continuing to run pension schemes. Echoing NAPF chief executive, Christine Farnish’s speech once more, Willetts also called for greater tax relief on long term savings.
Less rigidity on when savings can be drawn out, and whether a fund could be inherited were further points touched on. The Conservative Party will be consulting the financial services industries over the coming months to discuss the creation of a “Lifetime Savings Account”, which it says, would allow consumers to draw on as they wish, and pass on to their children.