UK - New pension credit proposals could make occupational schemes irrelevant for many staff on lower incomes, a think-tank warns.
The report by the Institute for Public Policy Research (IPPR) – an independent think tank which has close ties to the Labour government – claims the new pensions credit regulations will leave many facing a “messy compromise”.
IPPR researcher and co-author of the report, Richard Brooks, said: “The intention of the pension credit is to focus help on low earners, improve incentives to save and control costs to the public purse.
“We should recognise that these three goals are always in tension and the pensions credit represents a messy compromise.”
Under the new rules many more workers will be means tested making it much less worthwhile for them to save for retirement.
The criticisms come in the wake of a government-backed independent simplification review – which is already underway – headed by former National Association of Pension Funds chairman Alan Pickering.
Brooks said: “Simplicity is often a second priority for government. Developing systems that people understand should be a policy goal in itself.”
The IPPR saves some of its strongest criticism for the complexity of pensions policy noting that forever changing rules “daze and confuse” workers – leaving them ill equipped to provide for themselves in retirement and reliant on state provision
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