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Pension reforms must pass five tests, says Hutton

Any plan to reform the pensions system must pass five key tests that will secure its longevity and sustainability says John Hutton, secretary of state for work and pensions, at a speech to the Institute for Public Policy Research in London today.

Hutton says: “As my predecessors have made clear, the primary responsibility for security in old age must rest with the individual and their family. The state must provide a floor below which no-one should fall but it must also allow everyone the opportunity to build a decent retirement income.

“If we are to achieve a lasting pensions settlement for the 21st century then I believe that any long-term package must be fair and simple to understand. But it must also be affordable to the tax payer and therefore sustainable.

“Any arrangements must stand the test of time and be flexible enough to adapt to the changing needs of tomorrow’s society. We do not want to be in a position where what is implemented today is uprooted and changed by different governments tomorrow.”

Hutton reiterated that the government would approach the forthcoming report from the Pensions Commission with an open mind and seek to secure a consensus across all parties in the future.

Hutton adds: “We approach this debate with a genuinely open mind. This is the start of the debate, not the end of it. Generations of progressive politicians have risen to the challenge of ensuring that the State provides a foundation for security in old age. I believe it is now our turn to see the scale and depth of the challenge and to rise to it. Government cannot solve the pensions challenge on its own.

“Instead we must work together to build proposals which will pass the tests of personal responsibility, fairness, affordability, simplicity and sustainability. And ultimately pass the most important test of all, securing our future with a lasting pensions settlement.”


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Pension freedom: wish you were here?

Out there lies a warm ocean of desert islands, sun, sand and palm trees, where individuals can choose how and when to tax-efficiently access their pension fund and realise the retirement dreams they have worked so hard for.


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