Pensions fit for the future

Two million pensioners will be lifted out of means-tested benefits through a new simpler state pension system and workers will have the opportunity to retire on two-thirds average earnings, thanks to new plans from the National Association of Pension Funds (NAPF).

Launched today, "Fit for the future - NAPF's vision for pensions" sets out a blueprint for the UK pension system that builds on the Government's 2012 reforms and ensures the pensions system will provide people with an adequate retirement income far into the future.

The NAPF's proposals include:

Creating a new simpler state pension, the Foundation Pension, worth £8,000 a year which will lift two million people out of means-testing and give them a pension worth one third of average earnings.

Revitalising workplace pensions by developing innovative new pension designs to help employers run schemes and by proposing that, in the near future, consideration be given to increasing the new statutory minimum contribution from 8% to 11%. Doing so would ensure that everyone has the opportunity to receive a workplace pension worth around one third of their former earnings.

A permanent independent Retirement Savings Commission should be established to take the politics out of pensions and ensure a long-term and enduring political settlement.

NAPF Chief Executive, Joanne Segars, said: "Our proposals are designed to create a pension system which is fit for the 21st century.

"They increase the value of the state pension for everyone, radically reduce concerns over means-testing, and increase the value and quality of workplace pensions.

"The Government's 2012 reforms are a major step forward and our proposals complete the task."