UK – Former social security minister Peter Lilley has introduced a bill to parliament calling for the introduction of a universally funded second pension – though the bill has no chance of success.

Lilley, a minister in the last Conservative government, has introduced a so-called 10-minute rule bill that would require people to save so that they would not depend on means-tested benefits. A 10-minute rule bill is a device to enable MPs to express their views and won’t lead to legislation.

Lilley said: "My bill would introduce a universal funded second pension to replace the present, largely unfunded state second pension.

“Everyone would have an individual fund into which they would pay enough throughout their working lives to provide a big enough income in retirement - together with the basic state pension, to enable them to avoid being dependent on means-tested benefits.

He told IPE that his idea has virtually no chance of being taken up as policy unless there is a change of government. But he said there had been interest in his ideas from members of the ruling Labour party and others.

The bill is a condensed version of a pamphlet he produced last year for the Social Market Foundation which took onboard comments from, among others, Professor David Blake of the Pensions Institute, Mary Francis of the Association of British Insurers as well as Watson Wyatt’s David Harris and Mike Wadsworth and Mercer’s Tim Keogh.

"Currently we compel prudent people who voluntarily save enough for their own future to pay again through tax to support the less provident who do not save enough and rely on benefits,” Lilley said.

"The result of my proposal is that everyone would own their own pension fund which would give people choices and incentives.

“Once people have their own pension fund and know that their minimum contributions will lift them above the means-tested level, they will find it far easier and have every incentive to put in additional savings and save more than that basic minimum.

"My Bill will not only ensure that everyone would have a comfortable and dignified retirement, but would bring about the largest extension of wealth ownership this country has known since the spread of home ownership."