In its response to the government white paper on pensions, the Chartered Institute of Personnel Development (CIPD) has urged a holistic approach to pensions policy.
Although it supports the proposals for a National Pensions Savings Scheme, the CIPD believes that by removing the government’s default retirement age of 65, withdrawing means-testing and offering financial incentives in the form of monthly cash prize draws, swifter progress on pensions can be made.
Charles Cotton, CIPD reward and recognition adviser, said: “We applaud the government for taking a long-term view of pensions and in particular for its proposal to set up a National Pensions Savings Scheme.
“However, this large-scale initiative needs to be supported by greater encouragement and support for employees to save for and work beyond retirement.
“To do this, the government should consider providing incentives such as monthly prize draws, but also, to remove the default retirement age process that acts as a major barrier to those who wish to work beyond retirement.
“Against the background of an ageing population, this bureaucratic and complex procedure is at odds with the government’s anti-ageism policies.”
Mr Cotton also believes that communication has a large role to play. He explained: “The government has failed to consider the education and communication issues fully.
“No matter how good the reforms are they will not sell themselves. Only when individuals are told the value of their state pension, and that the age at which state pension is payable will rise, will they be able to make an informed decision about how much they really need to save and when they can expect to retire.
“Individual government departments need to join forces to raise financial awareness, improve communication and engagement programmes and ensure that all of the government’s policies contribute towards providing our pensioners with a comfortable standard of living.
“The government also needs to work more closely with schools and universities, employers and pension and savings providers to make sure individuals can make an informed decision about pension investments, savings and retirement.”
