Savings industry urges swift response on pensions

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The Independent Online

The financial services industry urged the Government to speed up its pensions reforms yesterday, criticising it for telling the Pensions Commission not to report until the autumn.

The financial services industry urged the Government to speed up its pensions reforms yesterday, criticising it for telling the Pensions Commission not to report until the autumn.

The industry is worried that the Government is putting off making hard choices until after the next election, which is likely to be next May.

Responding to the publication of the Commission's first report, published yesterday, members of the industry said that action needed to be taken as soon as possible to avoid an escalation in the crisis. Steve Bee, the head of pensions strategy for Scottish Life, said: "Realistically, any concrete changes coming as a result of the Pensions Commission's work are a long way away. The unsuitability of pensions for millions in the workforce, caused by the pension credit system, is one of the key things acting as a brake on any meaningful spread of pensions in the UK.

"If the Government could bring itself to say definitively that today's means-tested benefits for pensioners just won't be there when young people in the workforce get to retirement, we would have an immediate breakthrough that could get us out of the current distribution impasse."

Mike Fosberry, a director of Smith & Williamson, the stockbrokers, criticised the Government for using pensions as a political tool. "I believe people are fed up of seeing pensions used as a political football," he said. "We need to start by moving pensions policy away from government, which inevitably has a short-term agenda."

While the industry criticised the Government for its slow reaction to the pensions crisis, most broadly welcomed the report, chaired by Adair Turner, the former head of the CBI.

Stephen Mann, at Norwich Union, the UK's largest life insurer, said: "This report paints the starkest picture yet of people's lack of provision for retirement, fuelled by the fact that we are all living longer. What we need to see is clear decisive actions to get pensions back on people's agendas."

Ian Naismith, of Scottish Widows, said: "It seems unpalatable to the Government to pay higher state pensions, either through raising taxes or by increasing the state pension age.... The Turner report rightly identifies that the complexity of the UK pension system is bewildering to most people, and a real disincentive to saving."

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