Plans to raise the state pension to 68 for both men and women by 2046 have been unveiled in the Queen’s Speech.
Ministers say the proposed legislation would ensure fairness between generations while at the same time secure the long-term financial stability and sustainability of the pension system.
The Queen’s Speech also confirmed that state pensions would be re-linked to earnings within the next Parliament.
The government also announced that the Pensions Bill would create a delivery authority to ‘bring on board the expertise’ needed to design a successful Personal Accounts system.
Personal Accounts are set to be introduced in 2012 to encourage employees to save for their retirement.
The scheme will be primarily aimed at low to medium wage earners to increase their overall pension savings.
Employees will be enrolled into the scheme automatically and they’ll contribute 4 per cent of their earnings. Savings will be topped up with employer contributions of 3 per cent and tax relief of 1 per cent.
‘Trust and simplicity’
Which? personal finance campaigner Doug Taylor, said: ‘Which? welcomes the creation of a delivery authority for Personal Accounts but warns that consumer representation must be firmly imbedded within it in order to achieve the trust of consumers.
‘We have a once in a generation opportunity to create a pension system in which consumers can have confidence. Which? research shows that consumers value trust and simplicity over everything else when it comes to Personal Accounts.
‘This delivery authority must be independent and accountable as well as efficient, and be governed by a fully representative Board.’