CBI launches pension report
CBI calls for better pensions if you work until 70.
03:50 19 July 2004
Workers should be able to retire at 70 if they receive a bigger state pension in return, the Confederation of British Industry says today.
The employers body claims the rise - to be gradually introduced between 2020 and 2030 -would assist the low paid, reduce means testing, and help ward off "widespread pensioner poverty in the decade ahead."
The CBI's Pensions Strategy Group, comprised of business leaders and led by Unilever chairman, Richard Greenhalgh, says its model would see around 7.1 per cent of GDP spent on pensions by 2050/2051, up one per cent on present levels.
The CBI's 22-point action plan makes the case for a "reinvigorated" voluntary approach to pensions, with more monies put into company schemes by small and medium-sized firms and staff.
It also examined the use of tax credits of up to 3.5 billion pounds to boost up pension levels.
The CBI proposes an increase in the basic state pension (47.65 pounds for a single person and 79.60 pounds for a couple) to the level of the pension credit (105.45 pounds for a single person and 160.95 pounds for a couple).
New employees should automatically be put into the company schemes, the CBI argues, as this would increase the take up of schemes among staff.
But it balked at the compulsory introduction of pension schemes, as advocated by the TUC, for both firms and workers.
The cost of such schemes would cost UK businesses up to 22 billion pounds a year, it warns.
But Neil Duncan-Jordan, spokesman for the National Pensioners Convention, said the plan on working until 70 was a "backward step."
"It is nonsense to suggest that to give everyone a decent state pension will require people to work until they drop," he said.
"The money already exists in the National Insurance fund to pay all 11 million pensioners 105 pounds immediately and to suggest that we can only fund it through making people work longer is a backward step."
Brendan Barber, TUC general secretary, said: "Employees in particular will be angry that their employers are suggesting they should work until they are 70 before they get a state pension, especially as the CBI is lobbying hard for 65 as the age at which employers can force people to retire."