Turner Report on Pensions Reform Published
By Paul Cummins FCCA AITI MSc.Multimedia Systems
13 October 2004
The long awaited Turner Report on Pensions was published on 12 October 2004. This is an interim report by the UK Independent Pensions Commissionwas. The Commission's first report, is entitled ‘Pensions: Challenges and Choices', on the adequacy of pension provision and saving in the UK . The Report is of great relevance to all other EU and developed western countries. Its chairman Adair Turner concludes that in the UK pensioner's income will fall by 30% over the next 30 years unless remedial action is taken by the UK Government. Pensions Reform must now become a subject of debate according to Turner.
The report says that a combination of:
- higher taxes/national Insurance contributions,
- higher savings
- later average retirement age, or
- lower relative pensions
will be required to resolve the crisis.
On www.ePolitix.com ,and following publication of the Turner Report on Pensions,TUC general secretary Brendan Barber is quoted as calling for a "wider debate" on what he described as the "pensions crisis". Barber said the Adair report was set to "confirm that Britain is heading for a major pensions crisis, which may even be worse than previously thought".
"There will be no policy recommendations in this report, but the chances of rapid progress by politicians in a pre-election period are slim," he said.
"Instead its evidence should ignite a wider debate, with the hope that a real national consensus and a new pensions settlement can be established after the forthcoming election when the commission makes its final report.
"However there are some surprisingly large areas of agreement emerging from the debate already. These could provide the start of the radical overhaul our pensions system needs."
Barber warned that a voluntary approach to savings has failed, while there is also too much means testing and there should be more flexibility in the retirement age.
"If we are going to get a new pensions settlement that lasts, we will need to take some tough decisions," he said.
"Unions are prepared to play their part, and provide real leadership by telling people at work that nearly all of us need to save more."
Some of the graphics on the website http://www.metaphorbusinessgraphics.com will assist in simplifying the concepts
Martin Wolf in the Financial Times www.ft.com concludes that the Turner Report on Pensions itself offers three broad alternatives:
- revitalization of pensions
- significant changes to the state system
- an increased level of compulsory private pension saving
Now that the Turner Interim Report on Pensions has been published it is necessary for the debate to begin on how to resolve the key issues addressed in the Report. Turner will issue recommendations on UK Pensions Reform in the Autumn of 2005.