Date published: 2006/05/25
The BBC says:
The state pension age is to rise to 68 from 2044, as part of government proposals to strengthen pension provision in the UK.
The link between the state pension and earnings will also be restored within the next Parliament, Pensions Secretary John Hutton said.
A new savings scheme will be set up with automatic enrolment for staff and compulsory employers' contributions.
...
The key aspects of the proposals, the biggest shake-up of pensions for years, are:
- The state pension age for men and women will increase to 66 in 2024, to 67 in 2034 and 68 in 2044. Each rise will be phased in over two years
- During the next parliament, the state pension will be made more generous, and future increases will be tied to earnings rather than prices
- The number of years it takes for people to qualify for a full basic state pension will be cut to just 30
From 2012, people will be automatically enrolled into a new, low-cost national savings scheme, albeit with the chance to opt out if it is not suitable for them.
The proposed changes will have little impact on anyone currently over the age of 47.
...
Employees will be asked to pay 4% of their salary into the new National Pension Savings scheme.Employers must, in turn, contribute 3% while the government will contribute 1% in the form of tax relief.
Pretty much all of this has been well trailed in the media. One of the main outstanding problems is that the state pension is not being based on residency (as was sensibly recommended in the Turner Report). And we'll see in 2012 whether the government of the day is still willing to index pensions to earnings rather than prices.
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