UK - The state pensions system could cost at least 0.8% of GDP more than the government estimate of 5.8% of GDP by 2050, a report by the Pensions Policy Institute (PPI) has found.
The report, “What will pensions cost in future?”, also forecast that the total income received by older people from private pensions could decline over the long term if the shift from defined benefit to defined contribution schemes means a reduction in total private pension contributions.
Even if contributions do reduce, tax relief on private pension saving is likely to remain a significant cost to the government, it warned.
According to the report, all the proposals for state pension reform currently being discussed will cost more than the current system because they seek to improve pension outcomes.
By way of example, it indicated the “wide funnel of doubt” surrounding the future cost of pension credit, a means-tested benefit which will depend on the future performance of the private pensions sector. Because it is based on the extent to which older people work, it can not be forecast with certainty.
Currently around 75% of people with some entitlement take up the entitlement, the report noted. In future, the relative size of entitlements will increase under current government policy, and so more people might take up their entitlements.
A stable system should be designed to be sustainable for tomorrow’s elderly too, the report concluded.
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.