According to the Work Foundation, millions of pensioners face a grim retirement because of the Government’s pension strategy. The Work Foundation argues that we need a higher level of basic State provision, and a different sort of partnership between State and non-state providers, with an end to the morass of contracting out.

The Work Foundation recommends:
– A drastic re-think of Government pension policy. If this simplifies and restores confidence in the private pensions system it is likely to improve take-up.
– The resources to be spent on the Pension Credit should instead be spent on increasing the State basic pension and linking it to earnings.
– A genuine partnership of state, employer and individuals to deliver economies of scale through a combination of voluntary effort and legislation. This would take effect in a programme of standardising benefits, communication and administration.
– Contracting-out should be abolished, at the same time as Phase 2 of the State Second Pension is brought in (probably 2006-7) with a corresponding adjustment in NI contributions.
– Tax relief, which disproportionately benefits the higher-paid, should be altered to provide a tax subsidy for the lower-paid who contribute to non-state pensions.