Published by Andrew Haldenby on 22 June 2015
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This week Reform is publishing recommendations for the 2015 Spending Review. Each day we will publish analysis for each of the main areas of public spending.
Pensions policy poses a significant, albeit slow burning, challenge for the new Government. The Department for Work and Pensions estimates 11.9 million people are undersaving for their retirement. Meanwhile demographic shifts will see yearly expenditure on the State Pension and pensioner benefits grow by 1.3 per cent of GDP between 2015-16 and 2064-65. This is bad news for both public finances and the wellbeing of pensioners.
Action is needed, but caution is also called for. The full implications of policies affecting retirees take generations to emerge, people need time to be able to prepare for their futures, and retirement needs can be complex and varied. When navigating these challenges, the Government should be guided by three principles. Pension policy should:
The chapter sets out the steps policymakers could take to realise this vision. Specifically, the report argues the Government should:
An accompanying blog post to the report can be found here.