- A call by the National Audit Office for more joined-up thinking on retirement income policy has been welcomed by a former Downing Street pensions adviser.

Ros Altmann – an adviser to Tony Blair during his premiership – says the NAO’s review of Government support for retirement incomes has rightly identified that there is no overall, cohesive responsibility for this vital area of national interest.

Both the Treasury and the Department for Work and Pensions share responsibility for different elements of retirement income, but there are also 17 other Government departments or public bodies involved.

She says: “Responsibility for employers of older workers rests with the Department for Business, social care is under the direction of both the Department for Communities and Local Government and the Department of Health, fuel poverty falls under the Department of Energy and Climate Change and so on. In some cases, policies pursued by one area of Government can actually undermine the success of initiatives from other parts of the system.

“The UK has one of the lowest state pensions in the developed world, so it is important to ensure good additional private income in later life. However, by relying heavily on means-testing pensioner support, the state system undermines incentives to save, because those who save could end up losing retirement benefits that others who did not bother saving will receive.

“If increasing numbers of older people have very low incomes, UK long-term growth will decline as the spending power of the population falls.

“By encouraging longer working lives, people will be able to achieve higher later life incomes and facilitating part-time work can change the whole concept of retirement itself. Retirement should be a 'process' not an 'event', with workers cutting back gradually, rather than suddenly stopping altogether."

Altmann says sudden and total retirement is a waste of resources, stopping people from earning more money that could improve their own lives and also benefit the economy.

As people are living longer and healthier lives, it makes much more sense to consider reducing working time, scaling back, but still staying engaged in the labour force.

She says initiatives to encourage later working need to be managed coherently. Despite several much-needed and long overdue reforms being introduced in recent years, there is inadequate cohesion and vision. An over-arching structure needs to be articulated and managed to have maximum effect.

Altmann adds: “As an independent adviser to the NAO when it originally established its review, I suggested that there is an urgent need to ensure the right hand and left hand of government policy can work together. I hope this report will pave the way for more joined-up policymaking in future.â€

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