Smith calls for end of cliff edge between work and Retirement

20 June 2002



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People should be allowed a gradual downshifting from work into retirement Work and Pensions Secretary Andrew Smith said today.

Mr Smith said that the overall pensions framework is the right one and the Government will continue to build on the changes already made.

'We are going through a period of change. It's important that we understand the reasons behind that change, build on what works with reforms designed for the long-term needs of us all.

'We have to take a hard-headed look at the options in this area. We need reforms which have the confidence of business as well as trade unions.

'Changes have to be worthwhile for employees to save, confident in what they will get in return, and easy for employers to contribute. We need a framework that builds partnership in pension provision not a mutual aversion to responsibility.'

He added: 'I applaud partnership between trade unions and business. I have seen what can be achieved when we have worked together on the New Deal. If there was ever an area where we needed to build and strengthen partnership for the country's future, it is on these crucial questions of ensuring security in retirement for all.'

Mr Smith said: 'Reform should be based on the principles of

  • enabling people to make better informed choices in saving for their retirement

  • ensuring better information to help people make more meaningful choices

  • providing a range of simpler products

  • cutting red tape

  • encouraging partnership, and

  • removing perverse incentives by aligning pensions policy with the employment and active ageing agenda.'

    Pensions Minister Ian McCartney also stressed to the conference the importance of partnership when he said: 'The best policies are those which are based on consensus. I firmly believe the TUC has a great role to play in helping to shape the future pensions agenda and in encouraging both employers and employees to invest for that future.

    'Our strategy is simple - we want to ensure that all pensioners will have a decent income in retirement, therefore we have taken action to help all pensioners while giving priority to the poorest and the least well off.

    'I am personally committed to ensuring that we have a system in place that adequately protects individuals, that it is transparent, that has the appropriate level of regulation and incentives to encourage both employers and employees to contribute to some kind of pension provision.' Speaking at the TUC Pensions Conference in London Mr Smith said: 'Many people resent the sheer cliff edge between work and retirement - that on Friday they are deemed to be valuable members of the workforce but the following Monday they are shuffled off into retirement.

    'We need to give people real opportunities and incentives to enable people to stay in the work place for longer - where they want to. As well as getting rid of the perverse incentives to retire even when it might suit people to carry on working, perhaps part time, for longer.'


    © Department for Work and Pensions