UK - The government’s current pensions policy is at risk of unravelling, according to a report launched today (Aug 8) by IPPR, a leading UK centre-left think tank.

The report argues that the complexity and cost of the proposed Pension Credit as well as doubts over whether Stakeholder Pensions will reach their target group threaten the sustainability of the government’s plans.
“Clarity over what individuals need to provide for themselves and what the state will provide is needed if any settlement for retirement is to be sustainable,” notes the report.

IPPR suggests that this clarity does not currently exist and that a reappraisal of policy across pensions and long-term care is required.

Questions are also raised about the role of the basic state pension, the long-term future of the Pension Credit and the consequences of a majority of the population being means-tested in retirement.

A number of incremental and fundamental policy options are put forward for debate.
These include:
* Addressing the ‘advice vacuum’ for pensions, particularly on the question of whether to opt in or out of the State Second Pension
* Raising the basic state pension whilst phasing in a higher official retirement age
* Incorporating ‘early warning’ elements into the long-term care assessment tool to trigger preventative measures
* Introducing further compulsion for funded private pensions or for long-term care insurance

IPPR will publish a final report: ‘A New Contract for Retirement’ early in 2002.