UK – PricewaterhouseCoopers has suggested that there are four pension issues that need to be addressed by the government - better financial education, greater simplicity, fewer tax complications and improved age discrimination.

“We would suggest four priorities,” says PwC’s head of macroeconomic analysis John Hawksworth in a research note. “First, put resources into better financial education, probably starting in the schools.”

PwC’s second priority is to introduce a “much simpler” state pension system “focused on an earnings-linked universal pension rather than increased means testing”.

It also suggested the avoidance of “complicated additions” to the tax system, which it says make the system “ever more Byzantine and confusing”. Its final recommendation is for further measures to combat age discrimination at work.

The accountancy firm says it estimates that total assets in pension and long-term life insurance funds totalled almost 1.4 trillion pounds (2.12 trillion euros) at the end of 2002, or around 135% of gross domestic product in that year.

The report finds that the average total payment per pensioner is projected to fall from around 32% of earnings at present to around 25% of earnings by 2050.

But it says it is highly unlikely that the government will achieve the objective set out in its Green Paper in 1998 of raising the share of private pension payments to 60% of the total.

The news comes on the day the government’s department of work and pensions released a study saying that those working past state pensions age are better off and healthier.

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