PENSIONS WHITE PAPER Executive summary (437K) White Paper in full (2.7MB) The White Paper and all related documents Most computers will open PDF documents automatically, but you may need to download Adobe Acrobat Reader. Download the reader here

The announcement follows a three-year investigation by Lord Turner whose final report was issued in April.

The idea is to increase personal savings and reduce the growing dependence of pensioners on means-testing.

State pension

• The state pension age for men and women will rise gradually: from 65 to 66 from 2024; to 67 from 2034; and to 68 from 2044.

• No-one aged over 47 today will be affected by this change.

• The basic state pension will be uprated in line with average earnings, rather than inflation, probably from 2012 "subject to affordability and the fiscal position".

• The precise date for the link between the state pension and average earnings to be restored will be announced at the beginning of the next Parliament.

  Personal Savings Accounts

• A new system of personal pension savings accounts, similar to the National Pension Savings Scheme proposed by Lord Turner's Pensions Commission, will be introduced in 2012.

• All companies will have to offer auto-enrolment in the scheme to their workers unless they have a more generous occupational pension scheme which already enrols workers automatically.

• Companies will have to make a compulsory contribution of 3% of salary to the scheme, with employees paying 4% and the government 1%.

• The money will be invested on behalf of employees in a variety of savings vehicles, such as investments in stocks, bonds, and property.

• There will be further discussion with the pensions industry on how the scheme will be run and who will manage it.

• The employer contribution will be phased in over three years. The government will consider a longer phasing-in period for smaller businesses.

• Self-employed and unemployed individuals will be able to join the scheme on their own account.

  Help for women and carers

• The number of years of national insurance contributions needed to qualify for a full state pension will be reduced to 30 years for both men and women (it is currently 39 for women and 44 for men).

• Measures will be introduced to enable people caring for children or the disabled to build up an entitlement to a state pension without having to make a minimum level of national insurance contributions.

• The government says these change will mean that 70% of women will be eligible for a full basic state pension by 2010, as opposed to 30% now.

  Other changes

• The Financial Assistance Scheme (FAS), designed to help people whose workplace pension scheme went bust, is to be overhauled. Far more people will be able to claim from the FAS as a result

• The current system of "contracting out" from the State Second Pension will be abolished for defined contribution schemes (but not for traditional final salary occupational pensions). This will happen when the earnings link is restored for the basic state pension.

• The State Second Pension will evolve into a flat-rate top-up pension by 2030.

AT A GLANCE: WHITE PAPER & TURNER REPORT
Issue	White paper	Turner report
Pension age	Rising to 68 from 2044	Rising to 67-69 by 2050
State pension	Linked to earnings, probably by 2012	Linked to earnings by 2010
Nat'l pension savings scheme	Automatic enrolment from 2012, but workers can opt out	Automatic enrolment if no work scheme
Compulsory savings	3% employers, 4% workers, 1% govt	3% employers, 4% workers, 1% govt
Help for women	NI contributions reduced to 30 yrs	Based on residence not NI contributions