The Pensions Minister, Ian McCartney spoke recently at a work and pensions select committee and said: "the door has not been closed" on making pension contributions compulsory.
We already know that the government have set up a committee to look at compulsory pensions and as the take-up of stakeholder pensions has not been as good as expected, it could become a real possibility.
In addition to the relative failure of stakeholder pensions, there are many other issues that could lead to compulsory pensions. These include the state of the stock market producing lower returns, the gradual reduction of company pensions linked to earnings and employers reducing or stopping pension contributions on behalf of their employees.
Whilst the pensions minister indicated the 1% charge on stakeholder pensions had been sucessful and had led to other policies becoming more cost effective, he indicated that the State retirement age would not be raised. He said it would be an "unacceptable proposal".
Our view:
No one can take responsibility for your retirement except you. If you want your standard of living to stay the same then you have to provide for yourself. Do not rely on the Government's provision, it will not live up to your expectations.