In a move that could help lift up to two million British pensioners out of means tested benefits, pension’s experts are proposing a radical shake-up of the UK retirement industry.
Using the recently unveiled “Fit for Future” programme, The National Association of Pension Funds (NAPF), who currently represent 1,200 UK schemes, are hoping to reshape the country’s ailing pension and retirement industry. The programme will look to build on the Governments 2012 pension reforms, which will see employees automatically enrolled into existing employers pension schemes or into a new system of personal accounts.
In the report, the NAPF proposes that a new state “foundation pension” be introduced. This would combine the current, basic state pension and state second pension. Should this be implemented, it would be worth around £8,000 per year (£25 per week) for pensioners.
It was also suggested by the NAPF that workplace pension provision could be improved by the introduction of “super trusts” which are managed by a board of trustees. These would be offered on a regional, sectoral or national basis and add around 30 per cent to the eventual size of someone’s pension due to economies of scale.
In relation to retirement planning, the report also outlined the case for a single regulator in the UK pensions industry, combining the roles of the Pension Regulator and Financial Services Authority (FSA).
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