Long term care (LTC) providers and pensions providers are being encouraged to work together because both industries share the cost of retirement, according to a recent study.
The proposals for reform were outlined in A new contract for retirement, published recently by the Institute for Public Policy Research (IPPR), an independent centre left think tank. The report suggests that local authorities could work alongside LTC providers to share knowledge about LTC policies, free personal care and the private sector.
Speaking at a recent conference, Peter Robinson, senior economist at the IPPR, said: “We should now be having a debate about raising people’s expectations for a generous retirement. What we are suggesting is fiscally neutral and includes a portion of spending which mirrors the package of spending by the Government.
“We advocate an affordable, more simple system because the state will not provide for pensioners by 2030.”
IPPR researcher and co-author of the report, Richard Brooks, said: “The current state pensions system relies too heavily on means tested benefits and is too complicated. It damages incentives to save and makes pension planning extremely difficult.
“A decent basic state pension would make much of the current complexity unnecessary, and would help private sector providers to sell their products with confidence.”
The IPPR proposes to radically simplify the system by closing the State Second Pension system and replacing the raft of means tested measures with a substantial increase in the basic state pension to the level of the minimum income guarantee, indexed in line with earnings.
“We also recommend increasing the official retirement age to 67 by 2030, both to ensure that the policy is affordable and because people are living longer,” says Brooks. “Time is running out. The current system is unsustainable, because it is insufficiently supported by the public and is therefore vulnerable to a change of Government.”