The British Chambers of Commerce (BCC) has followed the chant of the Association of Consultant Actuaries for a voluntary pension system, warning that UK business will not accept footing the bill for the pension crisis by a future increase in taxes.
Bill Midgley, president of the BCC, in response to the Pension Commission report says that while business has a major role to play within the pension issue, raising tax is not the ‘way forward’.
“The overriding message that we are sending the Commission is that business could not stomach future tax increases to pay for state pension provision. Businesses can play their part in helping to resolve the pensions issue but clobbering them with tax rises is not the way forward,” he says.
The BCC says that enforcing compulsory contributions would put added pressure on UK employment issues, job creation and competitiveness of the UK economy.
The organisation argues that the ultimate saving responsibility still lies with the individual, while the overriding message to encourage this has ‘clearly’ failed.
For employers to offer to contribute to a pension scheme is important, the BCC points to its costliness for smaller firms, adding that Government should look to providing further financial incentives to help employers contribute towards pension schemes for their staff.
“The basis for a successful voluntary system is a simple state pension structure that individuals understand. It is crucial that a flat-rate higher state pension is introduced. This reform in itself will stimulate better private saving,” Midgley concludes.IFAonline
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