A RADICAL plan to deliver a guaranteed State pension of more than £200 a week was unveiled by a group of MPs and experts recently. The Pensions Reform Group, headed by former welfare minister Frank Field, proposed the Universal Protected Pension to take over from the Government's controversial new stakeholder scheme.

Indexed to wage inflation, the compulsory scheme would grow over a 40-year working lifespan to merge with the pension already provided from National Insurance contributions.

As a result a single pensioner would receive an average 28% of national earnings, which on maturity would provide a pension of £210.20 a week at 2000 prices. The current State pension is £75.50 a week. It would cost each individual up to 5% more in NI contributions, but big savings in welfare payments to the elderly.

Launching the plan at Westminster, Field claimed that when fully up and running it would ensure not only that every working person invested in their old age, but that they would receive a guaranteed retirement income well above the poverty level. Ministers have promised to study the document.

John Lynch of Pensions 100said:

I read the Executive Summary of Frank Field's "Pension Reform Group" report on the "Universal Protected Pension" (UPP) with great interest! The basis of the scheme lies in the following statement

"We (the Pension Reform Group) propose an alternative to the Government's plans, the Universal Protected Pension: a protected wage-indexed pension set well above the Minimum Income Guarantee. The Universal Protected Pension is to be composed by building on the basic state pension with a new, funded scheme. Our outline version of the scheme put forward in this paper is based on everyone aged 25 years old and in work when the scheme starts becoming a member. Thereafter everyone turning 25 and in work will automatically be a member".

This proposal by the Pension Reform Group is a plan which would allow a 25 year old person TODAY to contribute to and if they have paid in for a full 40 years then they get the (index linked) £210 weekly pension (at today's rates) in 2042.

What the article doesn't say is that the Plan says will not tackle Pension Poverty today - or even for the next 40 years! It only recommends an immediate £5 per week increase for 75-79 year olds and a £10 per week increase for 80 year olds. 

As a pensioner of today I am appalled that the Pension Reform Group consists of people who are unlikely to NEED this so called UPP when they retire! At least 5 of the 14 members represent finance companies that will benefit commercially from the contributions. None of the members represents a Pensioners Group in the UK. Any group that aspires to reform pensions should consult the people suffering from Pensioner Poverty 

I am also shocked that so much talent and brains should delve into the realms of Science Fiction and totally ignore today's pension problems. Between now and 2042 there will be many changes of government and interest rates. Public confidence in "Funded Pension Schemes" is dropping and has a long way to go before this confidence is restored. The only real solution to a proper retirement Pension is the safeguard of a strengthened National Insurance based state pension which is linked to earnings.

Joe Harris, National Pensioners Convention, General Secretary said:

"Having a debate on the issue of pensions is one thing - but these proposals will not put a single penny into the pockets of today's pensioners.

Private, stakeholder and occupational pension schemes do not provide the kind of financial security and certainty that is needed in retirement. That can only be achieved through a strengthened National Insurance based state pension which is linked to earnings.

But the Pension Reform Group's proposals would appear to undermine the principle of National Insurance - whereby employers and employees pay in so that everyone can draw out. That principle gives the kind of social cohesion that society needs.

The answer to pensioner poverty is to therefore use the massive surplus in the National Insurance fund to pay a higher state pension and link it to earnings so that pensioners really can share in the growing prosperity of the nation. Pensioners know it's the best way, the country knows it's the best way and over the next six months we'll make sure that Frank Field knows it's the best way."