Tories' pensions action plan

THE Tories have announced an eight-point plan to tackle the pensions crisis and 'restore our saving culture'. Shadow Pensions Secretary David Willetts published his blueprint 24 hours before the Government's long-awaited Turner Report on pensions is due to be released.

The hard-hitting Turner report will warn that there is a £57bn pensions blackhole - and that millions will have to work longer and save more to avoid poverty in retirement.

Up to 13m workers will have to save an extra £4,000 a year to guarantee a comfortable living in their old age.

'The Turner Commission will show just how bad the pension crisis has become,' said Willetts. 'If nothing is done, retirement will fall a long way short of our expectations.

'What we need now is action. We must reverse the spread of means-testing, strengthen company pensions and provide better incentives for saving.

'Today I am setting out eight steps which a Conservative Government would take to tackle the pensions crisis. Together, these measures would restore our saving culture.'

The key Tory proposals are:

Restoring the link between pensions and earnings, rather than inflation, to take more pensioners out of means-tested benefits. Over four years, that would give single pensioners an extra £7 a week and couples £11.

Scrapping the obligation on those over 75 to purchase an annuity, requiring them instead to ensure they had enough income to avoid relying on means-tested benefits.

Introducing a Lifetime Savings Account, with Government contributions to help fund retirement.

Longevity Bonds could be issued by the Government to help pension providers insure against the risk of providing a pensioner with an annual income for life.

Allowing companies to promote their pension schemes to employees, even though they are not registered to provide financial advice.

No limit on senior executives' pension funds, provided all employees could join the company scheme on similar terms.

Encouraging companies to assume all employees would join the firm's fund unless they actively opt out.

Using unclaimed assets in dormant bank and building society accounts to rebuild pension funds for victims of company schemes that are wound up when firms go bust.

Last night, Ministers were accused of putting off tough decisions on the pensions crisis until after next year's General Election.

Campaigners for the elderly protested that today's Turner Report from the Pension Commission will offer few, if any, concrete solutions to the problem.

Instead, the country will be forced to wait another year before Adair Turner, former head of the CBI, produces his final report, which will set out a blueprint for action to deal with Britain's pensions timebomb.

The painfully slow progress towards a solution was greeted with alarm last night by the National Pensioners Convention, the biggest pensioners organisation in the country.

NPC president Rodney Bickerstaffe said: 'We cannot wait too long. Today's older people cannot wait for 20 years.'

Helen Wanless from Age Concern said: 'The key is to start acting immediately. There are too many pensioners in poverty.'

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