Labour urged to axe triple lock and make means-test promise | UK | News
The worker was promised to scrape the triple lock and will never test his retirement payments to create an extra £ 11 billion per year. The Institute of Financial Research (IFS) said that the movement will make future retirees financially safer and will discuss problems with the current system. Together with the Pension Inspection, together with the Financial Justice Foundation, it includes reforms to assist vulnerable groups and develop special savings plans.
In addition, a guaranteed state included a pension framework and provided practical solutions to manage people’s pensions during retirement. Although the state pension has not been tested at the moment, the IFS called on the development of support for those approaching retirement age.
He called for ministers to establish a certain criterion for a new state pension according to typical wages.
Annual increases match the average wage increase, unlike the existing triple lock scheme, which increases their pensions by inflation rate, average wage growth or 2.5% – which is the highest.
Pension payments never fall below inflation, because when prices increase faster than earnings, temporary corrections will be allowed. The state’s retirement age will only increase if life expectancy improves.
Within the scope of the proposed plan, every employee between the ages of 16 and 74 will make compulsory contributions from the employers who are valued by 3% of their salaries regardless of whether they contribute to them.
IFS said it would increase the default contribution rates under automatic recording and protect the house for less winning people. Self -employed people will make retirement contributions through tax self -assessment.
IFS said that it will produce extra 11 billion £ each year in special retirement savings consisting of £ 5 billion from employers and £ 6 billion from employees.
Paul Johnson, the former director of the IFS and the co -director of retirement review, said: “There is much to be celebrated about the current UK Pension System. Average retirees are doing much better than previous generations.
“Retired poverty falls at very high levels in the 1970s and 1980s, and indeed for other demographic groups. The state pension has been simplified and now it is much more generous for many women than in the past.
“However, there is a risk of complaining when policy makers are in the case of pensions. Without decisive action, most of today’s working age population faces more financial insecurity through lower living standards and retirement.
“Our recommendations give the government an open and affordable road map: support the state pension, help workers to save more – but only when they are better placed to do this – and help individuals make the best use of retirement through retirement.”
