News story

21st November 2002

Liberal Democrats Launch "Priorities for Pensions" Paper

Steve Webb MP, Liberal Democrat Shadow Work and Pensions Secretary, has revealed Liberal Democrat proposals to tackle the UK pensions crisis.

Steve Webb MP, said:

“Pensions policy in the UK is in a mess. Millions of people approaching pension age are in limbo, worried that their retirement plans will be left in tatters. Urgent action is needed now.

“The Government inherited a pensions mess. Inactivity for the last five years has made things worse. Now the Government has decided to bring out a green paper of proposals to solve the pensions crisis – the second in four years. Tinkering is not enough. The system needs wholesale changes. Any delay would be condemning millions of pensioners to an uncertain future.

“People want a pensions system that is simple to understand, protects their investment and provides a decent standard of living.

Liberal Democrats propose:

· To scrap tax rules that prevent people from drawing a pension from their employer whilst continuing to work for that employer on a part-time basis.

· A drastic simplification of pensions, including the abolition of the state second pension. This would do away with all the complexities associated with "contracting out", leaving a system that is much simpler to understand.

· To make sure that everyone on moderate and higher incomes is building up rights either in a company pension or a stakeholder pension.

· To ensure that, where a pension scheme has to be wound up, the process should be streamlined, so that more of the fund goes to members of the scheme and less in fees.

· To enhance the basic state pension, particularly for older pensioners.

ENDS

Notes to editors

1. The Liberal Democrats launched their ‘Priorities for Pensions’ paper on Thursday 21st November 2002