UK - Government pension reforms will not solve the system's inherent problems which disadvantage women and low earners, a new study claims.
The Pensions Policy Institute says the current system assumes people are employed throughout a working life on a “good” income.
But its report – The Under-pensioned – says people who work part-time or have low earnings face poverty in retirement because the system does not take them into account.
The study states that any time not spent in full-time work reduced retirement income, because the basic state pension and the state second pension (S2P) both depended on contributions.
The report says these groups are also less likely to have saved for retirement through private schemes.
It also found disabled people and ethnic minorities were more likely to have low earnings, be unemployed or retire early than the stereotype used in policy planning.
And the PPI claimed new reforms to the pension system, which include redistribution through S2P and the rapid expansion of means-testing through the pension credit, would not solve the problem.
PPI research director Chris Curry said: “The pension system, which is based heavily on contributions, hasn’t moved on a great deal since it was conceived in the 1950s.
“It struggles to cope with the variety of work patterns people have. And worse, people are unaware they are getting a bad deal.”
The Royal Society of Arts (RSA) has reignited the debate on the introduction of flat-rate pensions tax relief - saying a 30% flat rate would be progressive, cost-neutral and leave three-quarters of earners better off.
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