The Pensions Commission's report must be a springboard for closing the savings gap, and not an excuse for further delay, according to the Association of British Insurers (ABI). The ABI's comments come in response to the publication of Lord Turner's recommendations on overhauling the UK's pensions provision.
The ABI says it supports automatic enrolment into pension schemes, with a matching employer contribution where the employee does not opt out. However, the association warned against the creation of a new, expensive and risky state quango, arguing that the expertise and infrastructure of the UK’s existing private sector can put the commission’s vision into effect.
Lord Turner questioned whether the private sector can do this at an acceptable cost. Yet the ABI insists it can, provided that it is asked to deliver the same service under similar conditions. Indeed, the ABI insists that private providers already do so for larger company schemes.
In reaction to the report’s findings, Stephen Haddrill, the ABI’s director general, commented:
Working with businesses to make sure that their contribution is affordable, we can increase overall levels of saving and achieve better pensions in retirement. Our industry can play a key role in achieving the goal that everyone wants, and offer better choice for the customer.
It is clear that Britain faces a pensions gap and that urgent reform of the state system and private saving is needed. People need to save more for their retirement, and they need help and encouragement to do so.
The ABI will make a constructive contribution to the government’s decision-making. The Turner report is complex and requires extensive debate of the options. We need the government now to act in a way that builds a wide consensus on improving savings levels in Britain.