The Labour party has ruled out introducing compulsory pension saving, saying there must be “many, many years of debate” before such a step is taken.
Treasury advisor Ed Ball, who is also a Labour parliamentary candidate, told a press conference that the government would wait for the Pension Commission’s report later this year and “future elections will occur before any of those changes get implemented in pensions policy”.
Compulsory payment into occupational pension funds by employers and staff is one of the options being considered by Adair Turner’s commission, and is supported by the TUC but opposed by the CBI.
The CBI claims that the 10% that the TUC wants business to be obliged to pay would cost £22bn a year.
Instead it advocates that all employers should automatically include all staff in a pension scheme and then give them the choice to opt out.
Australia has compulsory pensions saving but the debate still rages as to whether it has made any difference, since there is evidence to show some firms reduced company contributions to the legal minimum.