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Welfare Reform on the Web (November 2006): Pensions - UK

Pension reform

Work and Pensions Committee

London: TSO, 2006 (House of Commons papers, session 2005/06; HC 1068)

The Government has proposed significant reform of the UK pension system in its White Paper “Security in retirement: towards a new pensions system”. This report sets out the Work and Pensions Committee’s detailed response to the proposals. It concludes that on the whole the Government’s measures are the right way forward. The new system has a number of different elements with the most ambitious being the Government’s plan to introduce a new system of personal accounts for pension saving. The new system will also recognize the contribution of people with caring responsibilities. The proposals should reduce means-testing but there is uncertainty about long term projections. The Committee commends the decision to re-link the Basic State Pension to earnings but is disappointed that no firm date has been given. Lastly, they discuss the importance of giving people clear financial advice and support to make the decisions about their financial futures.

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