Hutton confirms affordability of new pensions

Fri, 09 Jun 2006

Lord Hutton has confirmed he believes the proposal to restore the link between pensions and earnings will be affordable.

The new legislation was announced by Tony Blair as a result of a deal struck with Gordon Brown last month to improve pensions income.

Mr Hutton said the government would instate the link by the end of the next Parliament.

He continued that proposals outlined in the Pensions White Paper have been agreed by the chancellor, who also made it clear that they will be kept in place after Tony Blair leaves the position of prime minister.

Mr Hutton further stated that the new pensions policy is set to take place in 2012 and that it will be confirmed by the beginning of the next Parliament.

Restoring the link between pensions and earnings is likely to raise retirement income, according to analysts.

This is because average earnings have been rising steadily over recent years, leading commentators to believe the new proposals will fill the current pension gap.

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