Think tank warns of confusion over government pensions policy

Government plans to target help for poorer pensioners could backfire according to a report from the centre-left think tank, the Institute for Public Policy Research (IPPR).

Age old attitudes, published earlier this month, found people were confused about what they could expect to get from state pensions and therefore to what extent they should be providing additionally for their retirement.

The report looks specifically at the new Pensions Credit which comes into effect in 2003. The intention behind the scheme was to make it more worthwhile for people with small occupational or personal pensions to make extra provision for their retirement without fear that any extra they make might be taken away from them through means-testing. Richard Brooks, co-author of the report said: "The intention of the Pension Credit is to focus help on low earners, improve incentives to save and control costs to the public purse. But we should recognise that these three goals are always in tension and the Pension Credit represents a messy compromise."

Brooks also warns that the new arrangements will only add to the complexity of a system which is already confusing enough for those trying to plan for retirement.

Age old attitudes?, £7.50 from IPPR, for further details tel: 020 7470 6100 or visit the website at www.ippr.org.uk.