Reinvigorating Retirement

Steve Webb Excerpts

Thursday 24th June 2010 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The Government are announcing today two key reviews as part of their strategy to reinvigorate retirement.

As set out in the coalition agreement, we have established a review into the timing of the increase in state pension age to 66.

Ensuring an equitable state pension is a key priority for this Government. We are protecting the future value of the basic state pension through the triple guarantee. However life expectancy at age 65 is increasing at a faster rate than was previously projected and we must make sure our pensions system is sustainable. The current fiscal position means it is right to consider the timing of the rise in state pension age to 66.

To support this review I have published today a call for evidence to inform an internal review. This provides an opportunity for people and organisations to submit evidence to help us reach our decision. This call for evidence will close on 6 August and we will publish our response in the autumn. This is to ensure that we are in a position to give as much notice as possible to those who might be affected by an earlier rise in the state pension age than expected.

To help ensure sustainability of the system over the long term the Government will also consider future increases to the state pension age and how best to manage the ongoing challenges of longevity.

As part of our strategy to encourage greater private pension saving we are also reviewing how best we can support the implementation of automatic enrolment into workplace pensions.

The coalition agreement confirms our intention to introduce automatic enrolment, which evidence shows is an effective means of increasing pension saving. However, circumstances have changed since the Pensions Commission published its recommendations in 2005. It is right that we consider whether the approach inherited from the previous Administration strikes the right balance between cost and benefits to individuals, employers and for the taxpayer, particularly in the light of current economic and fiscal conditions.

The review will be conducted by an independent team, led by Paul Johnson, Frontier Economics, David Yeandle OBE, Engineering Employers Federation and Adrian Boulding, Legal and General Group plc.

The terms of reference for the review and the call for evidence are available on the Department’s website at: www.dwp.gov.uk/policy/pensions-reform/latest-news. They are also available in the Vote Office and the Printed Paper Office.