Kevin Rowan

Nov 28 2005 By Kevin Rowan, The Journal

A year's deliberation later, we will this week receive the Turner Commission review of pensions in the UK.

Pensions is an issue that has been dodged for generations; the early 1950s witnessed the first serious concerns about the longevity of affordability of the state pension.

Rumour suggests Turner is likely to make three main recommendations: an `opt-out' state pension scheme; linking the state pensions to earnings; and an increase in the qualifying age for a full state pension from 65 to 67.

Most people will agree that introducing an opt-out scheme will lead to more savers. Literally millions of people are not saving at all for their retirement, and of those that are, many are not saving enough.

In that respect this initiative would be welcome, but it is a bit sly and does nothing at all to overcome the social attitude issues against pensions savings.

The TUC have a long-held policy that pensions should be linked to earnings. While this government has done much to lift pensioners out of absolute poverty, through benefits, fuel allowances and other initiatives, only the Pension Credit is linked to earnings (and only to 2008), not relating pensions to earnings means that pensioners have and will become increasingly worse off.

As a nation we are living longer. But the increase in life expectancy is not a uniform picture.

The more deprived the area you live in, the lower your earnings and the more stressful your job is, the less likely you are to even reach retirement age, even now, at 65.

There are occupational differences too, for male manual workers the average life expectancy is 68. Regions with high rates of deprivation and manual labour, ie the North, will see no benefit.

It is in the area of occupational pensions the government really needs to act. All parties need to contribute to ensuring a reasonable income in retirement. The Government needs to do its bit, so too do employers and individuals. The voluntary system has failed.

And don't believe the baloney that either the Government or employers can't afford it. That just doesn't wash when we enjoy the position of the fourth largest economy in the world, with the GDP growing year on year. It's about choices.

Pensions is one of the major social and economic challenges we face. A brave, radical solution is not only needed, it would also be incredibly popular.