Pension Schemes – Conservatives’ action plan for pensionsThursday, March 25th, 2010
On 18 March, the Works and Pension spokeswoman, Theresa May, announced the specific actions that a Conservative government would take on pensions:
- The 2012 reforms for auto-enrolment and the National Employment Savings Trust (NEST) will be addressed; auto-enrolment may be brought forward from 2012 on a voluntary basis, allowing employers to plan for implementation. Concerns about the need to ensure sufficient saving in the new NEST by lower and middle earners will also be tackled.
- New approaches to defined benefit schemes will be explored so companies can retain such schemes, and hybrid schemes with elements of defined benefits and defined contribution benefits will be explored. The regulations which make such schemes harder for companies to operate will be reviewed.
- The obligation to buy an annuity by 75 will be removed and people will be given more flexibility once retired.
- The link with earnings would be restored for the state pension, paid for by increasing the state pension age to 66 (by 2016 for men and 2020 for women) – in line with the consensus in the UK and Western Europe on the need to raise the retirement age.
- The current default retirement age of 65 would be reviewed to allow for greater flexibility in working beyond that age and encouraging it where it is practical to do so.
- Practical measures to encourage savings will be considered, including early access to pensions savings, as already happens in countries as New Zealand and the US.
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