Lord Turner's long awaited report has this morning been released suggesting that a new third tier National Pensions Savings Scheme (NPSS) be created to solve the pension crisis in addition to increasing the State Pension Age to 67.
They suggested that the existing State Pension be reformed with less means testing and be less biased between the sexes.
It suggests that employers and employees should pay into the new third tier pension on a compulsory basis and that these new style pensions will be technically Government Run Personal Pensions.
Employers to pay 3% and employees to pay 5% of pay above £5,000!
Our view
Doomed to fail as was stakeholder, compulsion is partly the way forward but education is still key. If you force people to save, they only redirect what they were saving elsewhere anyway, meaning that people will still not be better off.
In addition, making a level 'income' playing field for all when we retire will just mean that we introduce greater inflation.
If all pensioners have an extra £10 a month to spend then demand rises and price inflation ensues.