12 October 2004 - Government welcomes Pensions Commission report
The Government set up the independent Pensions Commission, chaired by Adair Turner, to look at long term trends in pensions’ savings, and assess whether there is any need to move beyond the current voluntary system. Today the Commission reports back to Alan Johnson, Secretary of State for Work and Pensions, with their initial baseline report.
Mr Johnson said:
“I would like to thank Adair Turner and his fellow-commissioners for their thorough analysis of this important issue. The Commission has had a hard look at the pension system in the UK, and has set out the stark challenges we all face in providing for increasingly long retirements. This report brings home the message the Government first highlighted in the 2002 Green Paper; that people must either save more or work longer.
In particular the analysis shows that occupational pension contributions and membership has been steadily slipping over at least two decades. These pressures have been largely unnoticed due to stock market exuberance.
“This is why we must continue our programme of rebuilding confidence in pensions, for example through the creation of the new Pension Protection Fund, as well as giving people the information they need to make choices about pensions and rewarding people who choose to work longer.”
The report’s main focus on looking at long term trends has identified a number of areas where the adequacy of pensions data has been lacking in previous years. The Commission has made a number of recommendations about how the Government collects and analyses statistical information. The Government welcomes and accept these.
Mr Johnson went on to say:
“The report shows the Government was right to tackle the appalling legacy of pensioner poverty that we inherited. Thanks to our policies the poorest pensioners are now £1800 a year better off and pensioner poverty has reduced by two thirds.
“We have also helped those on lower incomes to build a second pension and ensure that it paid to do so. Now with Pension Credit, savings are no longer knocked straight off benefits and the State Second Pension, together with incentives provided by the new tax credits, means that millions of low earners are being helped to save for retirement.”
“Just as we have evolved the state system in the past so we will in the future, striking the right balance between tackling pensioner poverty, helping all pensioners, and ensuring the right incentives for saving."
Notes for editors
- Alan Johnson presented the report to Parliament today together with the Written Statement attached.
- The Pensions Commission First Report can be found on its website: www.pensionscommission.org.uk
- The Pensions Commissioners are Adair Turner (Chairman), Jeannie Drake and John Hills.
- The Commission was appointed by the Government in December 2002 with the remit “to keep under review the regime for UK private pensions and long-term savings, and to make recommendations to the Secretary of State for Work and Pensions on whether there is a case for moving beyond the current voluntarist approach.”
- The Report’s main recommendations on data adequacy were:
- that the Office for National Statistics should as a major priority carry out a Wealth and Assets Survey to support effective analysis of pension and other asset accumulation and an understanding of savings behaviour.
- that the Department for Work and Pensions should continue to improve its technical modelling tools, and in particular that data from the Department’s “PENSIM2” model should be available for the second phase of the commission’s work.
- that the Government should consider how better data on Group Personal Pension and trustee-based occupational schemes could be gathered.
- that there should be greater cross-departmental sharing of knowledge, experience and insights on pensions data, and in particular that the Department for Work and Pensions and the Department of Health should share insights and co-ordinate work into the healthy/unhealthy ageing debate.
- The Government endorses and has accepted all the Commission’s data recommendations, and is already putting in place the mechanisms to implement them.
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