Pensions commissioner to call for higher state pensions despite tax implications

The head of the Pensions Commission is expected to press the government to introduce a more generous state pension when he publishes his final report this morning.

Lord Turner had previously proposed raising the state pension in line with earnings rather than prices, but his suggestions were reportedly dismissed as being unaffordable by chancellor Gordon Brown.

But the former CBI chief is expected to use his final report before the commission is disbanded to urge the Government to implement his recommendations, even though this is likely to mean higher taxes.

In an interview with the Observer newspaper at the weekend he said that no other major industrial country was trying to solve the global pensions crisis without tax rises.

Turner’s final report, which will deal with specific issues that have been raised in response to the commission’s recommendations, is also likely to cover the proposed introduction of a National Pensions Saving Scheme (NPSS).

This would see people who did not have access to a better occupational pension scheme automatically enrolled into the NPSS when they started a new job. They would contribute 5% of their salary, with their employer paying in 3%.

Comments are closed.