Lord Turner has outlined the findings of his report into the reforms needed for the future of pensions provision in the UK.
Lord Turner says difficult choices need to be made
Central elements of his proposals include the state pension age rising gradually to 68, and a new national savings scheme.
Here are the key quotes from his presentation:
"The problems in the UK's pension system will grow increasingly worse unless a new pensions settlement for the 21st century is now debated, agreed and put in place.
Unless people are willing to discuss it [a rise in the state pension age] they are not serious participants in this debate
"There are significant problems in our pensions system, there is a major demographic challenge.
"We are therefore convinced that a state system which is fair to all and a sound basis on which private pension saving can build, will require some mix of higher public expenditure as a percentage of GDP and a rise in state pension ages."
"People are living longer. That is a marvellous development which will only
become a problem if we fail to think through the policy responses required."
STATE PENSION AGE
"We propose the principle that state pension age should rise gradually so as to keep stable over the long term the proportion of adult life spent paying into and receiving state pensions.
"We have suggested that the state pension age will have to rise to somewhere between 67 and 69 by 2050 and that public expenditure on pension and pension benefits will need to rise from 6.2% of GDP today to between 7.5% and 8% GDP in 2050.
"The key thing is the principle - it [the state pension age] has to go up in line with life expectancy."
"Now different people will make and should make different judgements on that trade-off. That is a political judgement. But unless people are willing to discuss it [the rise in the state pension age] they are not serious participants in this debate. They are indulging in fairytale economics in which a fairy godmother makes all difficult choices disappear."
"State pension expenditure should be concentrated on providing as generous and as non-means tested flat rate provision as affordable, ensuring that people are kept out of poverty in retirement and creating a sound base on which private savings can build.
"Earnings-related provision should be built through a strong system of funded savings either by individuals or by employers on their behalf with the state encouraging people to save and enabling them to save at low cost but ultimately leaving it to individuals to make their own trade-offs between savings level, retirement age and retirement income in the light of their own preferences and circumstances."
"We are not suggesting that you get rid of means-testing [all together], that is unaffordable, impossible."
WHAT HAPPENS NEXT?
"I think there's going to be an open debate across all of politics. As I have said, I'm an optimist."
"I think the idea that anybody should be saying today that they either agree or disagree with a report that long is an absurd proposition. Clearly this is a large, integrated and complex report."