UNISON supports Lord Turner’s recommendation to increase the value of the State Pension and to make it fairer to women by reducing the qualification criteria. Linking increases to earnings is the only way young workers will have any faith that the benefit will be there for them when they retire.
UNISON is opposed to plans to raise the State Retirement Age. The low paid benefit the least from increases in longevity and rely the most on the Basic State Pension in retirement. Until such time as the older worker gets the support needed to continue in work the State pension should be there at an age when it is needed. Simply increasing retirement ages means many workers will be in worse poverty for longer and transfers the cost from the scheme to tax payers who will have to pay for more means tested benefits in the future.
UNISON supports the proposals moving towards compulsory employer contributions set out in the National Pensions Savings Scheme. The contribution of 3% is far too low. It is UNISON policy that the compulsory minimum employer contribution should move to 10% as soon as practicable. The scheme should also provide some form of benefit guarantee. A scheme where the contributions are too low and all the investment risk is on the member will not be able to deliver an adequate benefit. As has been seen with stakeholder pensions ‘cheap and cheerful’ options instead of being the first step to better pension provision often become the accepted norm and put pressure on good schemes to dumb down.
Society needs to come to terms with the rising cost of pension provision and be aware of the implications of the continuing decline in employers contributing to the pension provision of their workers.