Sir
It has taken the Pension Commission three years to develop its recommendations for the reform of UK pensions. Given the complexity of the subject and the number of stakeholders involved, we would be surprised if these recommendations were not followed by a further lengthy period of public debate. In the desire to achieve consensus, there also appears to be no hurry to proceed with what may prove to be the largest and most complex reform of UK pensions ever undertaken.
Meanwhile the UK continues to have both the poorest (measured as a percentage of average earnings) and most complex state pension system in the western world.
This is a system that will be relied on by the half of the UK workforce who currently make no additional pension provision; a system that undermines the case for saving, especially for those on low and middle incomes; a system that is so complex that it seems designed to prevent the UK population from making rational savings decisions. In short, the UK state pension system has already collapsed and is in need of immediate and urgent reform. The question that should be of central concern to policy makers now is: how can the pace of reform of the state pension be accelerated?
Despite the obvious failures of the existing arrangements, we have been struck by the absence of thinking around the practical issues involved in transitioning to a new model for UK state pensions. Our view is that there is already considerable consensus around what needs to change in the state pension system. It is therefore time to shift the focus from refining policy to focusing on how to deliver the recommended changes.
Based on the details that have emerged ("Turner blueprint for pensions", November 17), the scale of change will be immense and is likely to require collaboration between the public and private sectors as well as needing to overcome widespread consumer distrust on the matter of pensions. When published, the Pensions Commission report will provide a golden opportunity for the UK to finally implement a state pension system fit for the 21st century.
As the Pensions Commission engages in further consultation it would do well to remind all those involved to consider how much longer they can afford to continue to debate at the expense of today’s and tomorrow’s pensioners.
