Welcome to the Pensions Reform Group

"The Universal Protected Pension we put forward is the only workable scheme that guarantees to break the link between retirement and poverty" - Chair of the Pensions Reform Group, Rt. Hon. Frank Field MP.

The Pensions Reform Group was established in 1999 with membership drawn from politics, industry, academia, voluntary bodies, and other stakeholder groups. Our joint endeavour is to begin a serious and detailed debate on banishing pensioner poverty from our shores.

Latest News & Updates

Thursday, 21 July, 2005

In praise of the pensions credit - Pensions Week

The chair of the Pensions Reform Group, the Rt. Hon. Frank Field describes the success of pension credit in his latest column for Pensions Week magazine:

Gordon Brown can be proud of his record of delivering very sizeable additional income to the poorest pensioners - no other chancellor has a record to compare with this aspect of his stewardship.

You can read Frank Field's latest Pensions Week by visting the press page of the website.

Monday, 11 July, 2005

Pensions body defends shake-up proposals

The National Association of Pension Funds has defended its proposals to scrap the state second pension and the associated £9bn of rebates that go into company and private pension schemes.

The NAPF argues that the money from the rebates should be used to provide a more generous, non-means-tested, basic state pension.

Adair Turner, chairman of the government's Pensions Commission, has warned that that would cut private saving for pensions, at a time when most people believed that more private saving was needed.

But in a Fabian Society pamphlet, Christine Farnish, the NAPF's chief executive, says "we do not share the view" that scrapping the rebates would damage private pensions.

"Stopping contracting out does not mean less pension for anyone. It simply means that one part of the overall pension moves from being provided by a scheme or pension provider to being provided by the state," she says.

Contracting-out is anyway dying, she argues. In the mid-1990s almost three-quarters of employees were contracted out. By 2002 fewer than half were, with 13.6m out of 26m employees contracted in. Ms Farnish says it is clear "that there is a steady and growing trend for employees to contract back in".

Almost no new personal pensions are being sold on a contracted-out basis. Many providers are advising existing contributors to contract back in on the grounds that the rebates are not generous enough. Some are automatically rejoining their members to the state system. Only about a third of the rebate cash is going into traditional final salary schemes, and even for such schemes the rebates account for only about 15 per cent of the money they receive.

Most employers, she says, faced with significant deficits, would welcome the opportunity to reduce the cost of their schemes "by handing back a relatively modest part of the overall benefit promised - together with the rebate money - to the state".

The big advantage of scrapping the state second pension and the rebates that go with it is that a much simpler state pension system would result. That would make it more understandable. And once it guaranteed an adequate minimum in-come, much of the existing regulation around occupational and personal pensions could be reduced. That would remove many of the disincentives that stop employers and providers making pensions more widely available, she says.