'Workers responsible for old age'

By PAUL WAUGH
Updated:

 

WORKERS should take the main responsibility for providing for their old age, new Pensions Secretary John Hutton warned today.

Retired couple outdoors

In his first major speech since succeeding David Blunkett, Mr Hutton said pensions must be fair, affordable, simple and sustainable.

The Cabinet minister also set a fifth test for reforms due in the New Year, 'does it promote personal responsibility?' 'The primary responsibility for security in old age has to rest with the individual and their families,' he said.

A review headed by Lord Turner will say later this month that getting people to work longer can play a part in addressing the pensions crisis when it reports next week.

Mr Hutton is widely expected to raise the state pension age to 67 when he delivers his proposals in the spring. Today he told the Institute for Public Policy Research the welfare system must be 'a floor below which none should be allowed to fall'.

However, Mr Hutton added: 'Its primary role must be to enable people to provide for themselves, giving everyone the opportunity to build a decent retirement income that meets their needs and expectations.'

The reforms 'must be fair to women and carers', who suffer because of missed National Insurance contributions, 'correcting past inequalities and reflecting their changing role'.

'And it must be fair to those who have saved - rewarding those who have contributed and incentivising those who can save to do so.' Pensions must not put long-term stability of public finances at risk, Mr Hutton stressed.

He is expected to tie pensions proposals to wider welfare reforms including changes to incapacity benefit.

Q&A: What the pensions crisis means for you

'We should assess how re-prioritising welfare spending can make a contribution to supporting pension reform,' he will say. The reforms must also be simple so there is 'a clear deal' between the public and the Government.

'People need to know what the Government will do for them and they need to be clear about what is expected of themselves.'

Finally, Mr Hutton will say that the reforms must be sustainable so that they 'won't be pulled apart by successive governments fiddling with the system'.

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