UK 'needs radical overhaul' of pensions system

By Tom Farley, Wed 14 Jul 2010 - Published in Pensions

A major overhaul of the UK's pension system is needed to make people protect their financial futures, according to an expert.

Nick Scarrett, head of investment and pensions at Fair Investment Company, welcomed the coalition government's decision to scrap compulsory annuitisation at the age of 75, but claimed that more reforms are needed to improve the whole system.

Mr Scarrett pointed out that the government has pledged to review the country's pension system and claimed that any reform which is announced will have to be "radical" to be effective.

"People need more incentive to save into a pension scheme - just trying to force people into saving will not solve the problem. We need to look at the reasons why people are not investing into pensions," he commented.

The expert also suggested that the system should be made more flexible, to allow people to gain early access to their pension pot to fund major life events such as buying a house or getting married.

Earlier this month, Age UK charity director Michelle Mitchell called on the government to establish a clear timetable for the phasing out of the default retirement age.

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