Rahel reeves is set to Announce an overhaul of pension regime When he gives a major speech Mansion This month.
Chancellor is due to Appoint a commission in view of adequacy Pension system including saving quantity between self-employed, state pension And auto-neralment rates.
It was announced last July after Labor The general election won, but after the brutal tax-hiking budget of the Chancellor, the pressure of business got caught after anger.
But two officials familiar with the schemes told financial Times He plans to appoint a commission in the July 15 speech, believing the Chancellor that the UK pension industry is mature for a long time improvement.
Chancellor’s overhaul is allegedly planned to shake the auto-nervous regulations, which say that employees pay at least 8 percent of their earnings above £ 6,240 each year, with at least 3 percent each year from their employer.
Specialist Institute of fiscal studies (IFS), warning that the current rate of contribution will leave many pensioners without sufficient money in retirement.
About four out of 10 pensioners have worked in the private sector, which faces a cliff-edge in retirement with the current contribution level, the think tank warned.
It called a pension system for “decisive action” to create “fit for the next generation” last week.
It asked the employer to abolish the system of pension contribution, only when the employee also contributes, recommending that all employees should receive at least 3 percent of their total salary as contribution.
And IFS called for the most difficult support for those most difficult to hit the state pension age, as well as solutions to help people manage their pension money through retirement.
Former work and pension secretary David Gauk said that the IFS report was given full time to match the Chancellor’s pension review.
The former-Tory Minister said, “The government should provide a safe pension income, the age of state pension and increase should be with more support for those most difficult hits, and should be more contributed to help both employees and employers gradually get more financial security in retirement,” the former minister, who has advised the government.
And IFS Director Paul Johnson Said: “There is a risk that the policy makers have become self -conscious when it comes to pension. Without decisive action, many of today’s working population face more financial insecurity through low living standard and their retirement.”
Mr. Johnson said that the recommendations of the think tank will “sideline the state pension, help save the workers more – but only during those periods when they are kept better to do so – and help individuals to make their pension utensils through retirement”.
Government reviews will also look at the state pension level, currently £ 230.25 per week, or £ 11,973 per year for those who have contributed through National Insurance for 35 years.
Labor has repeatedly committed to triple lock, which increases the state pension amount to the highest inflation, an increase in average income or by 2.5 percent.
The Department of Work and Pension (DWP) was asked to comment.
