Pensions' report 'Turns' heads

Pensions' report 'Turns' heads

	Published : Wed, 30 Nov 2005 20:05 By : Paula Demarzio Print this Story

LONDON - Lord Turner's Pensions' report has not only stirred varied emotions in the nation's workforce, but has also highlighted the deep divisions within the Labour mindset. While on one hand Chancellor Gordon Brown is reportedly livid with the proposals outlined in the report, his boss the Prime Minister Tony Blair is reportedly pleased with the overall report.

In the report titled, “A New Pension Settlement for the Twenty-First Century”, which was released today, Lord Turner has outlined several radical proposals to lift up the sagging pensions' sector.

Key among these proposals is to hike the age at which an individual becomes eligible for state pension to 67 or even 69 by 2010 as compared to the current age of 65. This proposal will not have any effect on people aged over 50 at the present time, but are surely going to affect the younger generation, who have plans to depend on the state pension after retirement.

The other main proposal in the report is to increase the basic pension amount from the current £82 a week to £109.45 a week. This has been rated as one of the better proposals in the report. Lord Turner proposes that this provision be implemented by 2010.

The report also proposes the introduction of a National Pension Savings Scheme, dubbed “Britsaver”. This is deigned to co-opt all employees into a national savings scheme unless they have made adequate arrangements for their pension. Finally, Lord Turner proposes a gradual phase out of the state second pension known as Serps.

The report as expected has had mixed reactions from various segments. Work and Pensions Secretary John Hutton commented, "The government welcomes the broad framework of the … proposals and options and believes they are the right basis for the debate to come."

The Liberal Democrats also favored the report and sought assurances that Gordon Brown would not disregard it, "We must now have an assurance that the Chancellor will not be allowed to single-handedly veto the emerging consensus for reform. The state pension system is not the property of a single political party, let alone a single member of one political party," said Liberal Democrat spokesman David Laws.

Meanwhile, the compulsory employer pensions contributions proposals has had a cold response from the industry, "Compulsion would be a step too far for smaller firms, who simply cannot afford such a hike in the cost of employment," said CBI's director general Digby Jones.