David Prosser: Turner fails on the most basic test
Saturday 03 December 2005
After weeks of leaks and counter leaks, Lord Turner of Ecchinswell had a heartfelt plea to add on Wednesday as he presented his 800-page report on the future of pensions. He pointed out that, since the report was so comprehensive, anyone who immediately rejected its findings - or accepted them for that matter - would not have had time to make a considered judgement.
Lord Turner is understandably anxious about rumours that Gordon Brown has already decided to file the Pensions Commission's report under W for wastepaper, especially since he's just spent three years working on it. But while it is quite right that we should spend some time thinking about the detail of these proposals, I believe many people will be deeply disappointed in the report as a whole.
Here's the question I believe should ultimately be used to judge the Turner Report: will its recommendations improve the lot of those people who most need help with retirement?
Our society is one of haves and have-nots when it comes to pensions, amongst both people saving for old age or pensioners who have retired.
If you're still a saver, there are all sorts of excellent private pension schemes available, and you get generous tax breaks for investing in them. The only people who can't save using these plans are those who do not have the spare cash to do so.
Similarly, there are two types of pensioner. A large group of older people are living in poverty from which they have little hope of escaping. At the same time, many pensioners are very well off - Lord Turner's report points out that, on average, pensioner incomes are higher today than at any time in the past.
For me, the most essential challenge for all pension reformers should be to help those who are not in a position to help themselves - people of working age who can't afford to save and pensioners living in poverty. Unfortunately, I believe Lord Turner has not come up with the goods for them.
In the case of pensioners, the Pensions Commission's proposals offer little more than a suggestion that the Government should immediately offer the over-75s a universal basic state pension, irrespective of the National Insurance contributions they have paid. But Lord Turner has already accepted that the Government may not be prepared to pay for this measure.
As for people retiring in future - the group that the Commission was supposed to focus on - the proposals are good news if you are not on a low income. There'll be a new low-cost pension, where your employer will be forced to top up your contributions, and you'll retain the tax breaks on offer now.
But what about those people who do not earn enough to give up 4 per cent of their pay? And what about people who take time out of the workforce to look after children or take on other carer's duties? All these people will continue to be denied access to a private pension plan.
The best Lord Turner can offer is a recommendation that the basic state pension should become more generous. The mechanics of his state pension reforms are tortuous, but the gist is that we should restore the link between the basic state pension and average earnings, while guaranteeing that everyone gets this starting income. However, the Commission accepts that means-tested benefits such as the Pension Credit will have to remain - an admission that pensioner poverty will continue.
That's why I feel let down. It's true that there are all sorts of useful ideas in the report, but almost all of them will benefit people who are already doing reasonably OK. The pension have-nots, meanwhile, will remain exactly that.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Board creates magnetic field to achieve lift
Follow the latest events from this Champions League fixture
Company reveals $542m investment in start-up building 'a rocket ship for the mind"
Singer says the track was 'force-fed down people's throats'
techThe original free dating app will remain the same, developers say
- 1 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 2 Banksy arrest hoax: Internet duped by fake online report claiming artist's identity has been revealed
- 3 Former East 17 frontman Brian Harvey turns up at Downing Street and 'demands to speak to Prime Minister'
- 4 The inventor of the Facebook 'like' button says he never made a 'dislike' button because he feared the 'unfortunate consequences'
- 5 Russell Brand threatened with arrest after filming outside Fox News headquarters
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
Lord Freud: Tory welfare minister apologises after saying disabled people are 'not worth’ the minimum wage
Lord Freud hangs on as MPs of all parties 'call for his head' over disability comments
iJobs Money & Business
£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...
£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...
£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...
£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...
Day In a Page
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village