‘The below is a collection of policies forming one vision of a way forward to addressing a number of the outstanding issues. It is by no means the only solution and is offered as a straw man to provide a basis for debate but simple and effective provision for financial security in retirement will be essential. We need a holistic and co-ordinated approach to reforming the structure and detail of the UK’s pensions system, and, for all our sakes, we need to get this right.
‘Despite huge changes over the past five years, there are still significant issues to be addressed. This includes some new ones that have arisen from recent reforms, demonstrating the need for an holistic and co-ordinated approach to reforming the structure and detail of the UK’s pensions system.’
Buck’s five pension policy priorities for the next government:
• Create an independent pensions authority. The exact format, role and responsibilities to be determined in a forum early in the new parliament. Will drive development of a new framework within which necessary changes can be made and maintain long-term stability. Key attributes must include simplicity and intuitiveness, particularly for the member.
• Drive an increase in the size of pension accounts. The aggregate annual contribution under automatic enrolment should be set to target the minimum living costs level, assuming membership over a full career. In addition, the default should be for the auto-escalation of contributions through a career.
• Review the pensions tax relief regime, to give it proper focus and make it more robust for the future. Tax relief is a constant target of politicians looking to save money. The negativity this creates undermines pensions. The new authority should address this as a priority. One key change should be the abolition of the lifetime allowance, which discourages higher contributions.
• Encourage the involvement of employers in the provision of retirement income. Development of policies should always include consideration of the impact upon employers and seek to make that positive. Key elements would include financial encouragement through the tax system, and simplicity in administrative and regulatory requirements.
• Enable greater provision for the self-employed. This group has poor pension coverage. Their numbers have increased significantly since the economic downturn. They should be brought into the automatic enrolment and auto-escalation of contributions systems.
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