DEPARTMENT FOR WORK
AND PENSIONS News Release (ReferencePENS - 019) issued by The
Government News Network on 26 March 2007
The Government is
committed to maintaining momentum on pensions reform as it takes
forward proposals for a system of personal accounts, Minister for
Pensions Reform James Purnell said today.
A year on from the National Pensions Day, Mr Purnell said there
was now broad agreement on proposals such as restoring the
earnings link and raising the State Pension Age.
Mr Purnell said:
"A year ago we were seeking people's views on raising
the State Pension age; linking the State Pension to earnings;
making the system fairer for women and carers; and introducing
automatic enrolment into a workplace pension.
"The debate has moved on considerably in the last year.
There is now broad consensus around these proposed changes - which
form the main building blocks of the Government's pension reforms.
"The International Monetary Fund recently welcomed our
reform package, saying it would help to ensure both adequate
saving for retirement and fiscal sustainability.
"Going forward, we want to secure the same degree of
consensus around more detailed issues such as the charging
structure for personal accounts; the level at which contributions
into personal accounts should be capped; and the information needs
of people saving in personal accounts."
Mr Purnell said that there would be good incentives to save into
personal accounts because individuals' contributions would be
matched by an employer contribution and tax relief.
The DWP has received 60 submissions from organisations in
response to the personal accounts consultation period.
Mr Purnell added: "We will consider all these views
carefully before publishing our response in the summer."
Notes To Editors
1. The deadline for responses to the personal accounts White
Paper was on Tuesday, March 20.
2. The White Paper, Personal accounts: a new way to save, is
published today http://www.dwp.gov.uk/pensionsreform/new_way.asp
3. More information on pensions reform is available at: http://www.dwp.gov.uk/pensionsreform/
Annex
National Pensions Debate - One Year On
In the year since National Pensions Day the Government has worked
to move forward that initial, emerging consensus.
The National Pensions Debate culminated in six simultaneous
consultation events across the country on March 18, 2006. More
than 1,000 members of the public took part.
Participants in the debate told us:
* They accepted the need to increase working life because of the
pressures of an ageing population.
We have included measures in the Pensions Bill to gradually
increase the State Pension age to 68 by 2046. The proposed
increases will broadly maintain the proportion of adult life spent
over State Pension age at around 30 per cent - as it is today.
* They wanted a State Pension system that rewards contribution to
society, including non-work activities such as caring.
We have made delivering fair outcomes for women and carers a key
part of our reforms. Under the new system, a life of social
contribution in the form of unpaid caring will for the first time
be recognised and rewarded in the same way as a life of work. And
the reduction in the number of qualifying years required for a
full basic state pension means that there will be more flexibility
for everyone to combine various patterns of caring and working,
without damaging state pension entitlement.
* They agreed we needed to encourage people to save more for
their own retirement, whilst ensuring pensioners were not poorer
as a result.
We have provided a solid platform for saving by making a
commitment to restoring the link between the Basic State Pension
and earnings.
We believe that with the introduction of auto-enrolment and
personal accounts most people will have clear incentives to save
and to take personal responsibility because employees'
contributions will effectively be doubled thanks to an employer
contribution and tax relief.