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PFS calls on Govt to act swiftly to avoid state pension train crash

Statement from PFS chief executive Keith Richards

Publication date:

23 March 2017

Last updated:

22 September 2017

PFS chief executive Keith Richards has issued a response to John Cridland's Independent Review of the State Pension Age report, which was released on 23 March 2017:

"Successive governments have failed to address a state pension train crash waiting to happen, and it is time for the Government to act swiftly and decisively in response to the Cridland report's disturbing but broadly pragmatic recommendations.

The report exposes the fundamental mismatch between the need to encourage people to plan and save for a longer life in retirement, and the Government's short-termist pensions policies such as pension freedoms which encourage people to live for today.

For too long, political motivations have prevented any reform of the triple lock, which has clearly become unsustainable. Linking pension increases to earnings seems a more fiscally responsible and common sense approach and we'd urge the government to make this happen sooner rather than later.

Establishing a link between the pension age and longevity expectations has proved effective in countries including Sweden, Norway and Germany, and will introduce much needed sustainability to our system.

A mid-life MOT will help people plan for their later lives, particularly the vulnerable in our communities, and the financial advice profession stands ready to partner with the Government to deliver this service.

Without action, we are facing the prospect of severe levels of poverty in later life, and it is time that pensions regulation is considered in the context of long-term social and economic trends rather than treated as a political football.

The Government needs to seriously consider the idea of an independent pensions commission to come up with sustainable measures aimed at encouraging people to save more earlier, and not squander their wealth earlier in life."

This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.

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