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The Key Proposals and Conclusions of the Turner Pensions Commission At-a-Glance
6 December 2005
State pension reform
- The state pension age for men and women should rise to 66 by 2030, to 67 by 2040 and to 68 by 2050
- Increases in the state pension age should be linked to rising life expectancy
- The state pension should be more generous, with increases linked from 2010 to average wages and not prices
- The state system should become "as non-means tested as possible"
- In future the pension credit should rise by less than average earnings
- With the aim of easing the plight of women pensioners, entitlement to the state pension should be based on residency rather than national insurance contributions
- The over 75s should be entitled to a universal basic state pension
- The current state second pension should evolve into a flat rate payment
- A standing commission to monitor pension policy should be established
Boosting savings
- A new National Pension Savings Scheme (NPSS) should be established by 2010
- People who do not belong to a workplace pension scheme would be automatically enrolled into the NPSS
- Employers would be compelled to contribute to their workers' NPSS
- Under the NPSS, employees would contribute 4% of their salary, employers 3% and the government 1%
- Employers can opt employees out of the NPSS if they offer a pension scheme which operates auto-enrolment and the level of contributions match those under the NPSS
- Self-employed workers should be able to join the NPSS on a voluntary basis, while those not in paid work should be able to join and receive tax relief on contributions
- Workers who wished to contribute more of their salary should be free to do so
- People would be free to opt out of the NPSS
- People will be able to choose from a range of funds where their NPSS is invested
- The commission said annual management costs for the NPSS should be no higher than 0.3%
- It should be possible for money saved in the NPSS to be inherited
Longer working
- Age discrimination legislation should apply to over 65s
- The government should better publicise the already existing option for people to defer taking their state pension
- The government should consider whether to reduce or eliminate employer national insurance contributions for workers over age 65
- At present, training expenditure tends to be "skewed" towards younger people. The government should ensure all public training programmes are non-age specific
