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"Carrot not the stick for employers" - FSB on pension reform

On the day that the Pension Commission discusses options for the reform of pensions in the UK, the FSB has underlined the importance of encouraging rather than forcing small employers to be involved in pensions for their staff.

In a joint letter to Pension Commission Chairman Adair Turner, FSB National Chairman Carol Undy backs his commitment to seeking a wide consensus on the way forward.

The need to ensure a decent standard of living and prevent poverty in retirement and the importance of a fair and equal state pension as a foundation for private saving are principles most would agree on, she argues.

“Long term saving on top of an adequate state pension is the key to improving incomes in retirement.”

The most efficient way of providing access to pensions is through the workplace and the key, Carol Undy explains, is not compulsion but encouragement.

“Given the right environment employers can be encouraged to become more involved in, and contribute to pensions for their employees. More effective incentives on employers, particularly targeted at smaller employers are needed to create the right environment.”

She adds that help will also be needed for the self employed.

As the Pensions Commission acknowledged in its first report one of the ways of addressing the issues in pensions is to enable people to work longer.

“We look for this to be achieved flexibly, by encouraging those who want to work longer and providing the framework for flexible retirement”, Carol says.



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