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Brown's failure to change pension rules will hit older workers and employers hard 7 March 2001 Chancellor Brown's failure to change current Inland Revenue rules in today's budget will continue to prevent British businesses from offering flexible retirement to those who want to continue working, and it is hitting the UK economy hard, warns the Employers Forum on Age (EFA). So far the Government has not succeeded to meet its own deadline of March 2000. Members of the EFA have campaigned for a number of years for the Government to create more flexibility in retirement - in particular allowing an employee to draw part pension and part salary. Restrictions on occupational pensions, that prevent the drawing of pension benefits while reducing hours and salary, fail to reflect the demand for gradual retirement and have encouraged individuals to leave the workforce prematurely. This has contributed to increasing skills shortages and widening the poverty gap in retirement, which currently costs the UK economy an estimated £26 billion per year. Sam Mercer, campaign director of the EFA, says: "We are disappointed that the chancellor has not taken this opportunity to change pension regulations. The Government is in a powerful position to ensure employers are aware of the flexible retirement options already available and, most importantly, lead by example within the public sector. It also has a responsibility to make flexible retirement easier by acting upon recommendations as outlined in its own Performance and Innovation Unit report*, including changing the Inland Revenue and Department of Social Security rules. So far it has failed to meet its own deadline of March 2000. If the Government is to encourage people to remain economically active, it must act on its commitment." Last year, Howard Davies, chairman of the Financial Services Authority and the EFA, launched a campaign with some of the UK's leading employers - including Sainsbury's, BT, B&Q, BA, Nationwide and Manpower - to tackle outdated Inland Revenue rules. The campaign highlighted the failure of Government initiatives to ensure that employers and employees understand the flexible retirement options already available and argued that the Government should lead by example, emphasising the public sector's poor record in the area. *Winning the Generation Game, The Performance and Innovation Unit, March 2000 back to the archive |
