In a letter to Pension Commission chairman, Adair Turner, the Liberal Democrats have set out 10 key principles for pension reform, including the possibility of raising the State pension age after 2030. They are also calling for an end to means testing and incentives for people to take out second pensions, but oppose pension compulsion, and are demanding no change to the state pension age before 2030. The party believe that setting up an ˜Independent Pensions Authority" would make pensions ˜politician-proof" and ensure that second pensions would be in private hands rather than run by the state.
The Conservatives have said that they are pleased that the LibDems support their stance on means-testing, but believe that their other pension reform proposals don't stand up to scrutiny.
Our view
The Liberal's are looking at a different set of numbers to us. Raising the State Pension Age will probably happen, removing means testing is unlikely unless you want to bankrupt the country. Both Tory and Liberal's are headline chasing here and being unrealistic about how benefits can be delivered. Any of these routes will just mean higher taxes for workers who let's face it will be the voting minority in 25 years!