Government departments face a huge credibility gap in their efforts to reform the pensions system af...
Government departments face a huge credibility gap in their efforts to reform the pensions system after a report by the Office for National Statistics pinpointed serious deficiencies in the statistics being used to shape policy.
The Review of ONS Pension Contributions Statistics does not say that there is a complete lack of raw data, but does point out that the methods of extracting the figures needed are not meeting current requirements, and make it impossible to build policy on the back of stats.
There is no way the government can understand the pensions industry at present because of the lack of relevant statistics, the ONS review adds.
"Current statistics on contributions by type of scheme come from a variety of sources, and none are complete or sufficiently timely for policy purposes."
"There is a large range of data sources that cover pensions, but, partly owing to the complexity of the pensions industry, each is partial in coverage. Some are not timely and none gives a complete picture of the pensions industry."
"The arrangements for statistics are complex and users need to be aware of the quality assessments provided by each statistics provider in deciding which statistics are appropriate for their use."
National statistician Len Cook has commented on the findings that: "We would be in a better position today if this report had been written some years ago."
Noting the deficiencies, he is proposing the establishment of an "interdepartmental statistical working group" to ensure that the government can get the figures it needs in relation to "personal decisions that have effects that cross generations."
However, he also says that the review will not be followed up for another three years - far too late to have any meaningful impact on the pending spate of primary and secondary pensions legislation due over the next 18 months.
Meanwhile, another report has been published warning the government of the dangers of not closing the savings gap or extending the retirement age.
PriceWaterhouseCoopers warns that workers born in 1980 and who work for 45 years are likely to retire in future at age 65 on a pension equivalent to just 30% of final salary.
By age 85, that same person would be living on just a third of average UK earnings.
Women are likely to be even worse off PwC warns, because they will lose income when having children, face lower incomes when returning to work, and will be offered lower annuity rates on retirement.
Raising the retirement age to 70 would boost forecast male pension income by a third, the consultancy says.
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