UK - The UK should consider a savings scheme along the lines of New Zealand's new voluntary savings scheme as part of the solution to the looming pensions crisis, says the Pensions Policy Institute (PPI).
KiwiSaver is a scheme designed to encourage savings which sees new employees automatically enrolled and gives others the choice of opting in.
Employers must offer the scheme, but do not have to contribute and employees who join the scheme must make contributions of at least 4% of salary, but can opt out, and can take almost permanent contribution holidays.
The PPI said although there were differences in the retirement issues facing New Zealand and the UK, a similar system could be applied.
New Zealand does not have means-testing and the problem of undersaving is not as widespread, although there is concern over the savings habits of young people.
As in the UK, New Zealand does not have a compulsory pension system, but the country has less than 15% of employees participating in occupational pension schemes, compared to nearly half of UK employees, according to a survey by the Department of Work and Pensions.
“[KiwiSaver] has many features that might appeal in the UK: automatic enrolment stopping short of compulsion, a simple design, a visible flat-rate incentive, low administration costs directly controlled by government, a holistic approach to savings and help with home buying,” the PPI said.
“All those features could translate to the UK environment, and might be seen as improvements to the stakeholder pension.”
Under the New Zealand scheme, savings are designed primarily for retirement and are locked in until the age at which the state pension is payable, except in exceptional cases, the PPI noted. But no annuity has to be bought, so use of the savings is flexible.
But the institute warned the scheme would not be a single solution to the range and depth of retirement issues facing UK policy makers.
“The UK already has significant occupational and personal pension provision, with more generous tax relief available,” the PPI said. “Would a new BritSaver replace or add to that?”
PwC, KPMG, EY and Deloitte must break up their consultancy and audit businesses into distinct firms to provide greater focus on the "most challenging and objective audits", the competition watchdog has said.
The Department for Work and Pensions (DWP) has released its first batch of guidance setting out how the guaranteed minimum pension (GMP) conversion legislation may be used to resolve unequal payments.
This week's top stories include the government spending £800,000 on a Gogglebox advert and MPs writing to The Pensions Regulator about its engagement with the Railways Pension Scheme.