Blunkett: Pledging long-term solutions

David Blunkett has warned workers they can no longer expect to "hang up their boots" when they reach 65.

In his first speech as the new work and pensions secretary, Blunkett insisted he wanted to implement long-term solutions to the looming pensions crisis.

He described providing independence and enjoyment in retirement for an ageing population as not just a challenge for government and the pension industry, but "an issue for all of us".

Just a week after his return to the Cabinet following the government reshuffle, the former home secretary pledged to listen to experts and the public as he strived to reform the pension system.

And he told the National Association of Pension Funds' annual conference that the "perception of reaching 65 and hanging up our boots" had to change.

"When the pension system was set up, there were 10 people in work for every one in retirement," he said.

"We are now down to a ratio of four to one, and in the next 50 years that will come down to two to one.

"We have got to break down the barriers between our working time and our retirement."

Part-time options

Blunkett said a scheme needs to be introduced which allows people to come back to work after breaks away.

And people need to be encouraged to stay on at work part-time and do part-time work when retired.

The pensions secretary said: "I am reaching out to all groups to establish a consensus that will provide the stability, certainty and fairness we all want to see in the pension system."

And he added: "Reforming the welfare state is not just about tinkering with the nuts and bolts of managing pension payments.

"It is about transforming its nature from a safety net to a trampoline or escalator, providing support as it always has done but also enabling people to take responsibility for themselves."

The Association of British Insures welcomed  Blunkett's speech.

Director general Stephen Haddrill said: "The ABI welcomes David Blunkett's wish to forge a national consensus on closing the savings gap.

"We will help the government to build this consensus and find ways to raise the level of savings."