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‘Collective pensions’ to be unveiled in Queen’s Speech

4 June 2014

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A proposal which would see pensions shared between thousands of people is set to be unveiled in the Queen’s Speech later today.

Under the changes, workers would be able to contribute to collective pensions by 2016. 

Supporters of the idea believe that as administrative costs would be lower, pension incomes would be higher. 

Pensions Minister Steve Webb told the Sunday Telegraph that the move would give people “better value”. 

He said: “There are some quite strong claims made for how much better it is. People say you will get a 30% bigger pension. 

“You might, you might not, but clearly it is pretty unambiguous that you will get a more certain outcome and potentially a better one.” 

However, critics claim that the returns of a shared pension are not certain as unlike a fixed annuity, pensions will have a target for what they will receive in retirement, rather than a guarantee. 

The plan is based on schemes currently operating in the Netherlands and Scandinavia.