Following a three-year debate on the future of UK pensions, a reformed Pensions Bill has been published in a bid to provide a solid foundation for future retirees. However, public debate has claimed that the new bill will short-change today's pensioners.
Central to the reformed bill is that the pension age is set to slowly rise to 68 by 2046. Also key is restoring the link between the basic state pension and earnings, and combating the inequality problem to make the system fairer for women.
John Hutton, the UK’s secretary of state for work and pensions, said: The bill we are publishing today would give a guarantee to link the basic state pension to earnings, enshrining this commitment in primary legislation. This would mean that the state pension would be worth twice as much in 2050 than it would have been without reform.
In the long-term, the bill looks set to benefit future retirees. However, the new system seems to fail current pensioners.
This bill is very good news for future pensioners but short-changes today’s, said Gordon Lishman, director general of charity Age Concern. If the state pension age must rise to fund a better state pension, there has to be a significant transformation in the workplace to enable older people to continue to work if they want or need to.
He continued to say: Mandatory retirement ages must be scrapped and targeted programs must be put in place to support those who need training and those who cannot work.