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Pensions reform
Tony Blair and Gordon Brown have struck a deal on the future of the pensions system.
The prime minister and the chancellor have agreed to follow Lord Turner's recommendation to restore the earnings link to the basic state pension.
However, the introduction of the more generous pensions system will not come until 2012 to make it more affordable.
The final plans for reform of the pensions system are due to be published on May 22.
A Number 10 spokesman said: "We can confirm that we believe we have reached a deal.
"We are pleased with the progress we have made. There are still going to be some details that need to be finalised."
He said that it "looks like it will be linked to earnings".
Stakeholder Response: Help the Aged
Kate Jopling, spokesperson at Help the Aged, said: "Pensions reform is too important a subject to be caught up in political arguments between government ministers, so news of a deal comes not before time.
"Tony Blair and Gordon Brown must set aside their differences on policy to reach a settlement which will deliver a pensions white paper which sets a clear direction of travel for the government and which responds in full to Lord Turner's Commission.
"Help the Aged welcomes news that the differences in policy are being worked on, but we are concerned that Turner's report may well be subject to short-term political expediency in order to secure an agreement.
"The key issue for today's pensioners will be the urgent need to address poverty by raising the state pension to a level that secures decency in retirement.
"A fifth of our older population live below the poverty line - solving this problem is as important as choosing policies for the future.
"The government cannot continue to argue that means-tested benefits like Pensions Credit are the only answer.
"It is time now for a decent, living pension paid at a level which finally removes the scar of pensioner poverty."
Stakeholder Response: Association of Consulting Actuaries (ACA)
A spokesperson for the ACA told ePolitix.com: "The ACA has argued for a better state pension financed by a later state retirement age, so we welcome moves in this direction.
"We hope the state reforms that emerge also address the need for greater simplicity.
"Beyond this, the white paper needs to recognise that NPSS alone is not enough.
"It must not be allowed to displace better existing schemes: the Pensions Commission failed to offer any encouragement for good workplace pensions.
"How sad if all we have is NPSS that will place 100 per cent investment and longevity risk on to employees.
"There are particular dangers in the NPSS approach for the lower paid, who must have reliability in the level of pension expected and received.
"At present, good risk sharing schemes are subject to an intolerable level of costly regulation, built up over the last 20 years by misguided reforms.
"This must change quickly. We have spelt out three simple changes to present pensions legislation that would help existing scheme sponsors to continue to offer schemes better than NPSS, where the risk is shared between employers and employees.
"We need to get back to schemes costing employers 10 per cent of salary, and employees five per cent - the traditional 'two to one' ratio in a good scheme.
"Without these much needed reforms the government will continue to see, through its inaction, the destruction of good workplace pensions in the private sector, affecting millions of existing scheme members.
"Without white paper reforms good employers will ask why government has made pension provision so difficult.
"Without reforms, a growing and huge pension gulf will emerge between public and private sector employees that must eventually fuel a political response.
"Is this what Mr Blair and Mr Brown want as their political legacies?"
Stakeholder Response: Federation of Small Businesses
Mike Cherry, FSB national pensions spokesman, said: "We are pleased that the secretary of state for work and pensions has previously indicated that he is aware that pensions is such an important issue and recognises that small firms will need special attention as we move forward.
"As Mr Hutton rightly said, small firms represent the engine room of the UK economy.
"It is essential to set our members free to grow and boost the nation’s coffers. Burdening them with an extra cost is not practical and nor is it in the nation’s interests.
"For that reason it is vital that the government recognises that small firms are simply unable to survive if they are to be weighed down with a three per cent tax on them to provide for pensions.
"Employees must be enabled to provide for their future and the government must do more to restore confidence in pensions.
"As responsible employers, we will give employees every means to save.
"Forcing small firms to contribute is counter-productive to the government’s broader economic aims to boost UK business by focusing on supporting small firms."
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