According to a Dow Jones news report, the proposal came from The UK National Association of Pension Funds (NAPF), the UK’s largest grouping of institutional shareholders.
The NAPF said in a wide-ranging policy paper that the citizen’s pension should be worth 22% of average earnings. The flat-rate pension should rise in line with earnings, the NAPF said, and be available from age 70 rather than 65.
Individuals should be encouraged to make their own private pension provision on top of the citizen’s pension, the NAPF said.
The proposals come at a time when the UK Government is seeking to reform private retirement pension provision, looking to make individuals save much more for their old age
Others Aspects of NAPF Plan
In addition, the NAPF suggested:
- abolishing restrictions on retirement age
- offering more generous tax treatment for longer-term savings
- rewarding pension savers more than savers in mutual funds or other short-term savings vehicles
- abolishing rules limiting individuals’ ability to join more than one pension plan.
The NAPF proposed offering better pension protection for occupational pension plan members nearing retirement age whose employer goes bust and removing rules preventing employees continuing to work for the same employer while drawing down part of their pension.
It also suggested the abolition of rules restricting the amount individuals can pay in, or receive in benefits from, their pension scheme.
“Today’s pension system is weighed down by red tape, jargon and complexity,” NAPF Chairman Peter Thompson said, according to Dow Jones. “Because of this, too many of today’s workers are put off thinking about pensions, storing up potentially massive problems for the future.”