Compulsory pensions could be a vote loser
The Fabian Society has warned that compulsory pensions could be a vote loser for Labour.
11:00 20 September 2004
An influential think tank has warned that making pension contributions compulsory could prove a vote loser for the government.
The left leaning Fabian Society warned that introducing compulsory contributions would "distract from the problems of the UK pensions system" and employers may be forced to push through cuts in wages to pay for the scheme.
In an open letter to the newly installed work and pensions secretary, Alan Johnson, Fabian research director Richard Brooks argued that more needed to be done to reform the state system of means-tested pension benefits before ideas like compulsion could be considered.
An employer taskforce on pensions, chaired by former Sainsbury boss Sir Peter Davis, is believed to be planning to recommend that retirement saving should be compulsory through workplace schemes.
A government-backed pensions commission, chaired by former Confederation of British Industry boss Adair Turner, is also examining the issue.
At the TUC conference last week union bosses called for compulsory contributions, citing research that showed 70 per cent of the UK population was in favour of compulsion.
The Association of British Insurers, The National Association of Pension Funds, the CBI and the Adam Smith Institute have all rejected compulsion in favour of improved incentives for employers and workers to invest in pensions.