Action plan unveiled to tackle pensions crisis

A Government-commissioned report has forecast  that 12 million people face poverty in later life because they are not saving enough. The report comes amid growing concern in Greenwich about pensioners’ ability to get by – especially in the context of soaring local taxes. Greenwich Conservatives have backed a national action plan to tackle the growing pensions crisis, including helping pension ‘wind-up’ victims.

Alistair Craig, Parliamentary Spokesman for Greenwich & Woolwich explained, “Pensioners have been let down by Labour. Their promises to help pensioners have been shown to be all talk. Pension schemes have been taxed to the hilt by a £5 billion a year tax, more and more pensioners are being forced to fill out insulting means-testing forms, and 1/4 of the increase in the basic state pension since 1997 has been swallowed by higher council taxes for single pensioners in Greenwich and 2/9 for pensioner couples.”

Outlining an Action Plan for pensions, Alistair has pledged to restore the link between pensions and earnings, help wind-up victims, and introduce new incentives to save for retirement. The plan – part of Conservatives’ Timetable for Action – calls for:

• Restoring the link between pensions and earnings, which would increase the pension for a single pensioner by £7 a week and for a pensioner couple by £11 a week.

• Freeing people with private pensions from having to buy an annuity at 75.

• Helping wind-up victims: Tens of thousands of people have paid into a company pension which they were told was safe, only to lose their savings when the company became insolvent. Using the unclaimed assets in dormant bank and building society accounts – which Gordon Brown has targeted for unspecified charitable purposes – would help rebuild the pension funds of wind-up victims.

• Introducing a Lifetime Savings Account on a ‘buy one, get one free’ principle; savers’ contributions would be rewarded with government contributions.

• Introducing longevity bonds to reduce the risks that company pension schemes face.

• Removing the cap on total pension contributions that people can make, provided that all employees at a company are eligible to join the same pension scheme.

• Allowing companies to promote their pension schemes, by relaxing the Financial Services Authority regulations that restrict the financial advice they can give.

• Encouraging company pension schemes to assume that employees want to join unless they opt out themselves – i.e. encouragement, but not compulsion.

Alistair added, “I fear the pensions crisis would be made worse under Liberal Democrats’ flawed policy of abolishing tax relief on pensions for higher rate earners. It would discourage people from saving for retirement and punish the growing number of people, who aren’t very rich but who now are in the higher tax bracket.

“People want less talk, more action. We must reverse the spread of means-testing, strengthen company pensions and provide better incentives for saving for Greenwich's pensioners of today and tomorrow. We will give single pensioners an extra £7 a week and couples an extra £11 a week. It is time to restore dignity and security in retirement.”