Pensions not the answer to pensioners’ crisis
Ros Altmann outlines 21st Century pensions reform proposals at TISA Conference.
Pensions alone cannot solve a looming pensioners’ crisis caused by the baby boomer effect which from 2010 is set to drive a huge growth in the UK population aged over 65.
This was the stark warning given by leading pensions expert Dr Ros Altmann at the Tax Incentivised Savings Association (TISA) Retirement Savings Challenge conference today (26 November 2008).
Dr Altmann argued that a flat-rate and fair to all state pension along with changes to allow lifetime savings to be a linked supplement to, rather than a replacement for, later life income must form the core of the proposed reform of 21st Century pensions. This would be essential in order to restore confidence and encourage the consumer to focus on their financial needs in retirement.
“The government’s current pension reforms are like re-arranging the chairs on The Titanic and will not deliver the radical changes necessary” Dr Altmann said. “Indeed, as currently designed, initiatives like Personal Accounts could make pensions provision worse by levelling down employers’ contributions to the minimum 3% level for example.
“We need a policy that looks further ahead than the short-term political horizon to create an environment for people to save towards their retirement using all available savings vehicles, but in a joined-up, coordinated manner.
“Continuing to expect people to contribute all their retirement savings over many years into a ‘locked box’ is no longer appropriate. Changing financial demands on people, improved life expectancy and more flexible working practices particularly in later life mean we need a more relevant system.”
Moving to such a system would throw up challenges for the savings industry which would need to create attractive mass-market savings vehicles. However Dr Altmann contended that this radical re-think of UK pensions could lead the way in showing other countries how to overcome their pensions crisis.
Ends
For further information contact Dr Ros Altmann 07799 404747 (mobile), Email ros@rosaltmann.com
Tony Vine-Lott, Director General, TISA – Tel: 01372 374728, Mobile: 07790 006108Email: tony.vine-lott@tisa.uk.com
Issued on behalf of TISA by Cauldron Consulting, contact Steve Radford, Tel: 020 3178 7238, mobile: 07889 903786. Email: steve.radford@cauldron-consulting.com
Notes for Editors
The Tax Incentivised Savings Association (TISA)
TISA is the premier trade association in the UK retail savings and investment industry. By engaging with member firms, government, political parties, regulators and consumer groups TISA’s ultimate goal is always to further consumers’ best interests. It seeks to improve the range, features and quality of savings and investment schemes available whilst at the same time encouraging more people to save for their long term financial security and peace of mind.
Uniquely, TISA is able to articulate the opinions of the whole savings and investments marketplace through its membership comprising over 120 member firms involved in the supply or distribution of products to the sector and its consumer interest. TISA’s remit extends across the broad spectrum of government sponsored savings and investment vehicles including:
• Individual Savings Accounts (ISAs)
• Child Trust Funds (CTFs)
• Savings Gateway
• Personal Pensions
• Investment Bonds
• Employer based pension schemes
• Wraps and platforms
• Other consumer-centric savings schemes and initiatives.
HM Government uses TISA’s market knowledge and ability to represent the views of both the savings and investments industry and consumers to help it to its policy in this area. Recent TISA successes include improvements to the ISA, the regime in which ISAs operate and simplification of the CTF.