At a debate attended by pensions minister Malcolm Wicks and Conservative policy chief David Cameron, consumers' rights organisation Which? has been challenging government policy on improving public services through extending choice.
New Which? research found that the government had failed to listen to what the public want on key areas like health, food, education and pensions.
Which? was highlighting the gap between the choices offered by government on key public services and the ones which people actually want.
Stakeholder Response: Which?
Graham Vidler, head of policy, said: "The government has to wake up to the fact that choice in pensions has left millions of workers unsure of their financial future and will mean that future generations have to pick up the bill for today’s failures.
"Which? research shows that more than 70 per cent of people support further compulsion in the pensions system; we agree, and the time has come for the government to accept that choice in pensions is a choice the vast majority of people are unable and unwilling to make."
Stakeholder Response: Association of Chartered Certified Accoutants
A spokesman for the ACCA said: "ACCA believes that a stable and well structured system of pension planning, involving the complementary operation of both state and private sector, is essential to ensure long-term confidence for workers and stability for the public finances.
"The UK private pensions industry currently faces substantial problems which need to be addressed by long-term and consensual policies.
"Above all, the recovery of the UK pensions sector depends on government giving a strong lead in encouraging and enabling individuals to save for their retirement and making it worth their while to do so.
"Consumer confidence in pension saving needs to be tackled if more individuals are to be encouraged to divert substantial parts of their lifetime earnings into private retirement saving. People need to be assured that their investments are likely to be safe and that their contributions will benefit them in the long term.
"The special circumstances of the self-employed also need to be addressed - the current rules on compulsory annuities discriminate unfairly on those who have no option but to take out personal pensions.
"Knowledge that, under the annuities system, the 'pension pot' will be returned to the insurance company in the event of death and not to the saver's family and/or dependants, acts as a serious disincentive to saving.
"Just as individuals need incentives to save, employers need incentives to offer good pension schemes to their staff. With a reported black hole in fund shortfalls of around £300 billion and equity markets awaiting a sustained recovery, businesses must be given tangible help to run schemes and encouragement to contribute to their funding.
"One positive step would be to restore dividend tax relief for pension schemes. Government must at the same time take care to avoid turning the operation of a workplace pension scheme into an excessively onerous obligation. If running a pension scheme is regulated too heavily, many more workers will see their saving options restricted."
Stakeholder Response: Help the Aged
Mervyn Kohler, head of public affairs at Help the Aged, said: "Which? is right to be forceful in its opinion that choice in pension provision is failing. This is an area of policy where hard truths have to be faced and difficult decisions made.
"Our new report, ‘Pensions, not pin money – Ensuring a decent retirement for all’, lays out Help the Aged's recommendations for action to eliminate pensioner poverty and lay the foundations for a secure future for present and future pensioners.
"One of the report's recommendations is that there should be some form of compulsion on employers to provide a minimum contribution to pension schemes. The voluntary principle in private pension provision is clearly failing.
"For some years now, employers have been backtracking on their responsibilities to their employees, with final salary schemes closing or being downgraded, and many firms taking the opportunity to reduce their contributions as they move to defined contribution schemes. The approach we propose has already been gradually introduced in Australia, with real success and little pain.
"This compulsion should not, however, apply to employees until much more has been done to enable and encourage people to work longer, should they wish to do so. We need to see an end to age discrimination in the workplace, alongside more and better training for older staff, quicker routes back into work for those prematurely on the scrap-heap, flexible working patterns and stronger incentives to remain in work.
"These measures would all help to address the premature drop-out of older staff from the workplace before retirement age, increasing the proportion of those aged between 50 and 65 remaining in work. Scrapping normal retirement ages would be a sign that employers are taking this seriously.
"We want to see an end to the poverty that blights the lives of over two million older people. There is a crisis, despite government protests to the contrary, and if it is not tackled effectively, it will affect generations to come, not just those who are already at or near retirement age. The government’s own statement of principles on pensions, unveiled a few weeks ago, was far too timid. Child poverty has been a top priority for the last eight years; it is high time pensioners were treated with the same energy and imagination."
