Pension problems

SOME subjects in politics have been dubbed “wicked issues”.

They are so called because trying to solve them throws up as many questions as answers.

Pension provision is one such issue.
We have already seen in Cardiff how devastating the consequence of pension collapse can be in the case of the former ASW workers.
Their case is awaiting a hearing at the European Court of Justice following action by their union Community.

On a wider scale the problem is how do you help the poorest pensioners without discouraging people form saving for retirement.
In addition how do we pay for the pensions of the future with more and more people living longer, and proportionately fewer of working age?

This was the task set for Adair Turner, the former head of the CBI, by the Government in the report published this week.

Is it best to rely on the basic state pension to meet retired people’s needs?
If so the retirement age may need to be raised, to afford to pay a pension to everyone at that level.

Would it be better to target resources at the poorest pensioners as the Government has done in a very successful way since 1997?
But does this in the long run make people reluctant to, themselves, save for retirement?

If that is so, should compulsion be introduced to force individuals and employers to contribute into a pension?
But who is responsible if things go wrong, and is it right to force people to save?
It is effectively a retirement tax.

These are the big questions the government has to wrestle with.
They go well beyond the usual electoral cycle of 4 or 5 years, which is why we should all work together to find the right answers for the future.

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