CBI calls for bigger pensions and later retirement

The
retirement age should be increased to 70 in exchange for a bigger state
pension, the employers’ group CBI has said in a report.

The
report on the future of UK pensions said the rise would help low-paid workers
and reduce the need for any means testing.

It
wants the change introduced between 2020 and 2030, and also urged firms and
staff to put more into company schemes. The CBI said its plan would see around
7.1 per cent of GDP being spent on pensions by 2050/2051, compared with 6 per
cent now.

Regarding
company pensions, the CBI said that new employees should automatically be opted
into schemes, as this was the best way of increasing take up.

It
rejected calls from the TUC to make it compulsory for both companies and
individuals to pay into a pension scheme, saying this could lead to some firms
actually reducing their contributions to the legal minimum.

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The
group is instead calling on the Government to increase incentives for both
companies and staff to pay into pensions schemes, particularly for small and
medium-sized firms, and people on low earnings.

By Mike Berry