Reform of the retirement sector is fully underway following Tuesday's Emergency Budget as pensions secretary Iain Duncan-Smith outlines the Government's plans for the coming months.
The Secretary of State for Work and pensions has set out what he calls the ‘bold steps’ that will be taken to revamp the ‘outdated and inadequate’ system.
Despite criticism about the reforms, which were announced during Tuesday’s Emergency Budget, the Government believe that the reform will help give people a better deal in old age.
Some of the reforms announced included abolishing the default retirement age, increasing the state pension age and scrapping compulsory annuitisation.
Public sector pensions will also face a review headed up by Lord Hutton.
But many have already begun to doubt the coalition’s moves, saying it will force people to work into their 70’s and will increase poverty in retirement.
Secretary of State for Work and Pensions, Iain Duncan Smith said: "Britain used to have a pensions system to be proud of, but due to years of neglect and inaction we are left with fewer people saving into a pension every year and the value of the State Pension has been eroded, leaving millions in poverty. We must live up to our responsibility to reinvigorate the pension landscape.
"People are living longer and healthier lives than ever, and the last thing we want is to lose their talent and enthusiasm from the workplace due to an arbitrary age limit.”
Speaking alongside his colleague, Pensions Minister, Steve Webb said: "I've worked all my life to get a fairer deal for pensioners. Up to ten million people are not saving enough and we cannot allow this situation to continue.
"Our plans to reinvigorate pension saving will be underpinned by automatic enrolment into workplace pensions from 2012. But we need to make sure we get the details right, which is why we're announcing a thorough and speedy review, to make sure that it pays to save."
Their agenda will be driven by restoring the link between the State Pension and earnings from 2011, consulting on how quickly to phase out the default retirement age and an independent review of how to make auto-enrolment work.
A team of three independent experts will spend three months looking at how to make automatic enrolment work before reporting back to Government in the autumn.
Team leader, Paul Johnson said: "This is an important review for the Government and I am delighted to have been asked to lead it. We are fortunate that we will be able to build on the phenomenal work of the Pensions Commission, and all the work that has happened since then. I look forward to working with interested parties during the course of the review."
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