Pensions institute calls for proper debate on long-term outlook for state pensions

The independent Pensions Policy Institute (PPI) has called for a full debate on state pensions policy to try to avoid the risk of tomorrow's pensioners, particularly those who have been on lower incomes during their working lives, being worse off than today's.

The PPI is backed by a range of industry bodies as well as the TUC. In a report released earlier this month, The pensions landscape, it sets out the current state of play and what is likely to happen in the future.

It argues that while pension provision today is better than in the past there is still a problem of pensioner poverty. In the short-term the Institute believes that average pensioner income will continue to grow. However, it warns that: "inequalities will increase if means-tested benefits are not taken and if private pensions remain focused on higher earners - as is likely."

The PPI says that it is the longer-term problems that need to be addressed now and that the future cost to the state of current pension policy is not clear.

It argues that: "The right balance between the cost to the state of paying state pensions and the cost to the state of encouraging private pensions should be debated."

The Institute warns that: "More than one third of future pensioners face being disappointed with their future retirement income."

Copies of The pensions landscape are available at www.pensionspolicyinstitute.org.uk, tel: 020 7848 3744 or e-mail: [email protected] - the Institute has also just published an introduction to the UK pensions system, The pensions primer.