IoD wants government to allow Britons to work until 70 |
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Published
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Mon, 26 Sep 2005 06:05
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LONDON - The Institute of Directors (IoD) has added a new twist to the knotty problem of pensions by stating that Britons should be made to work until they are 70 and should compulsorily pay into their pensions. Also businesses should be spared from making mandatory payments into the pensions system, the IoD will tell the government's Pension Commission, led by Adair Turner.
The Institute of Directors will submit a set of proposals to the Pensions Commission including the demand to raise the state pension to £109.45 (E162, $197) a week. Another dramatic proposal calls for the closure of the ‘gold-plated’ public sector pension schemes so that the government can tide over the crisis that is threatening to swamp the pensions system. “We have to start looking at some very strong medicine indeed to cure the UK pension problem. Sacrifices have to be made by all of us here and now for the sake of future generations and the health of the economy.
The government needs to make tough decisions that not everyone will be happy with, but make them they must, sooner rather than later,” said Miles Templeman, the IoD’s director-general. IoD also wants the government to scrap stamp duty on equity transactions and inheritance tax on pension funds as these unnecessarily eat up valuable money. It also recommends that the government should adopt a flexible approach to the retirement conundrum.
It says that if some workers want to continue working beyond the age of 70, it would result in saving 2 percent of Britain’s gross domestic product. “We have to stop the spread of means testing. It is a disincentive to save. It arises from the fact that, almost uniquely, we have a basic pension below our poverty line,” Templeman commented.
Adrian Turner is due to submit his take on pensions reforms in November.
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