Towards a new pensions
The case for a new Pensions Commission
Ben Franklin, Senior Research Fellow, International Longevity Centre
The case for a new Commission
• Policy change
• Progress since the last Pensions Commission
• Continued macroeconomic uncertainty
• Rising life expectancy
• Changes to State Pension:
– Move towards flat rate
• New pension freedoms
• Extending working lives
• Public sector pension reforms
• Long-term care funding reforms
Progress since the last Pensions
…saving more? Yes but from a low base
Active members of occupational pension schemes, 1953 to 2013 (millions)
Continued rising life expectancy
Projected changes in the State Pension age over the next 50 years
State Pension age
Legislated Young age Central Old age
66 2020 2020 2020 2020
67 2028 2028 2028 2028
68 2046 2036 2031
69 2049 2034
70 2063 2037
Year within which the rise is fully implemented
Summarising the case for a new
• Retirement planning is difficult with numerous moving parts to consider.
• It has been made more complicated as savers have faced constant policy
• Combined with the perfect storm of falling real incomes, low investment
returns and rising life expectancy.
• A new Pensions Commission is needed to rebuild consensus via broad
consultation and tackle the challenge of income inadequacy in retirement.
A blueprint for a new commission
• Central focus on ensuring adequate retirement incomes for the long term.
• Based on consensus-based policymaking.
• Specifically focus on:
1) defining target outcomes for savings and extending working lives.
2) developing a mechanism to regularly monitor progress
3) deciding on whether new policy reforms are needed.
• Commission should set out the rights and responsibilities of individuals, employers and
government with respect to long term retirement income adequacy.
• Report to Secretary of State for Work and Pensions, Chancellor and Prime Minister.
• Headed by a group of 4 experts from; academia, charity sector, industry and employees.
• Not become a permanent body.
• Be set up immediately after the election but not seek to make recommendations until
Senior Research Fellow
International Longevity Centre - UK
Twitter: @ilcuk @bjafranklin
Rt Hon Steve Webb MP
Minister of State for Pensions
National Association of Pension Funds