UK – UK pensions minister Andrew Smith says the government must not be tempted by a “quick-fix” solution to pensions reform as it readies its long-awaited Green Paper, due next week.
“We must not yield to the temptation for a quick-fix solution that could jeopardise those elements of the UK pension system that are working well, nor the many important reforms we have introduced since 1997,” says Smith.
Writing in the Financial Times, he adds that many consumers are “still bewildered” by the complexity of pensions and that they are not always able to make the right choices.
“That is why the government must look closely at Ron Sandler’s recommendations for making financial products more accessible and think about how to ensure that people have greater access to individually tailored information about pensions.”
“We must make it easier for companies to get on with providing good pension schemes. But balance is needed to ensure that the right regulation is in place to protect members as well, this, too, will be a principal focus of the green paper.”
He hinted that the government would propose raising the retirement age. “Perhaps the most radical change we must consider is when people stop working,” Smith said.
The department of work and pensions would not comment on the Financial Times’ unsourced report that the government will deny that there is a 27 billion pound (41.9 billion euro) pensions savings gap in the UK when it releases its proposals next week.
Deborah Cooper, an analyst at Mercer Human Resource Consulting, said: "Everybody knows that the government has lost its way on pensions, and the mark of true leadership is having the guts to acknowledge this.
"The government wants people to save more in a way that reduces the burden on the State. But it doesn’t seem to realise there should be something in it for everyone else."