"Last chance saloon" for voluntary pensions

A new report has underlined the perilous state of Britain's pensions crisis.

14:38 13 December 2004

A new report has underlined the perilous state of Britain's pensions crisis.

The official government report, published today by the Employer Task Force, gives a "clear warning" that action needs to be taken if the current voluntary system is to remain.

The group, headed by former Sainsbury's chairman Sir Peter Davis, claims too many employers are ducking their responsibilities to offer decent retirement provision.

Sir Peter said: "While employees must take some responsibility for their own pension provision, employers can and should play a major role in helping people save for their retirement.

"We want the current voluntary approach to work and believe employers have an opportunity to build on and improve the current framework in a way that makes sense for business.

"But make no mistake, we are in a last-chance saloon for voluntarism and unless we can reverse the current decline in employer-led pension provision and deliver increased savings from both employers and employees through the voluntary framework, the government may be forced to look at more drastic solutions."

The pensions crisis has also led to threats of industrial action, with public sector union leaders meeting today to draw up a campaign of action against "attacks" on their members' pensions.

Controversial plans to axe the final salary pension scheme and increase the pension age for civil servants, unveiled by ministers last week, have increased the prospect of strikes ahead of the general election, which is widely expected to be in May.