The government and the pensions industry have met to try and reach a consensus about how to solve the UK’s looming pensions crisis. The government plans to publish a White Paper out in the spring in reply to input from bodies such as the Pensions Commission, the National Association of Pension Funds and the Association of British Insurers. The biggest sticking point so far is whether to adopt the National Pensions Saving Scheme proposed by Lord Turner’s Pensions Commission. Under the scheme employees would be compelled to pay in 4% of their salaries, which would be topped up by 3% from employers and 1% in tax relief. Speaking at the conference in London, secretary of state for work and pensions John Hutton said the government would look at all the alternatives before making a final decision. “People are not saving enough for their retirement and it is crucial that any future reform tackles this effectively,” he said. “If we expect people to save more for their retirement we need to help them to do this with confidence.” “The National Pensions Saving Scheme is one option for encouraging more retirement saving. Industry groups have put forward their alternatives and we will now look at the detail before publishing our White Paper in the spring,” he added. The National Association of Pension Funds recently labelled the proposed National Pensions Saving Scheme “Stalinist”, which Lord Turner told Personnel Today was an absurd idea.
