Pension must provide for an aging workforce

Pension must provide for an aging workforce

03 June 2010 / by Lois Avery

Pensions still need more clarity despite the government’s plans, that’s the message from Just retirement.

The new coalition has announced proposals to raise the default retirement age from 65, scrap compulsory annuitisation and link pensions to earnings or inflation so that savers get the most out of their retirement funds.

But despite this Just Retirement say that more flexibility is urgently needed to help people make the most of their pension funds and that care provision must be put into place to deal with an aging population who will face longer in the workplace.

Because people will be working past 65 they could see a large chunk of their later years filled with ill health.

David Cooper, marketing and distribution director at Just Retirement said: “The ability to reflect a change in health with an increased income will come at a time when those concerned are likely to be facing new and significant costs. Any review of pensions should take this into account in order to ensure individuals are able to meet their needs in retirement.

“This represents an opportunity to harmonise provision and would enable pensions to reflect the true needs of an increasing proportion of the population. We would hope that this issue will be picked up by Mr Duncan Smith and by the proposed Commission on care."

Full details of the Government’s pension shake up is due to be announced within the emergency Budget on June 22.

© Fair Investment Company Ltd