Speaking exclusively to The i Paper at the Pensions and Lifetime Savings Association (PLSA) conference in Edinburgh on Tuesday, Mr Bell dismissed the idea of introducing means-testing when asked, stating: “No, only Kemi Badenoch thinks that’s a good idea.”
Currently, the full new state pension is worth £221.20 per week (£11,502 per year), and under the triple-lock, this will rise by 4.1 per cent in April to £230.30 per week (£11,975 per year).
His comments come amid renewed debate about the sustainability of the triple-lock, which was introduced by the coalition government in 2010, and whether means-testing the state pension could target resources more effectively.
Countries such as Australia and Canada have adopted means-tested pension models, where state support is targeted at those most in need.
According to the Office for Budget Responsibility (OBR), the state pension system costs UK taxpayers £125bn a year – and that figure is set to rise significantly in the coming decades, which experts at RTS financial planning think “may force the Government into making tough decisions”.
“By 2045, the number of pensioners is projected to skyrocket, and the state pension could swallow an even larger chunk of national spending.”
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The pledge costs an extra £11bn per year, the Institute for Fiscal Studies (IFS) previously said.
The Organisation for Economic Co-operation and Development (OECD) has similarly called for reforms to ensure the UK’s pension system remains financially sustainable in the long term.
When asked if there would be any changes to the Government’s approach following the feedback, he said: “We are not going to be changing the approach to the consultation on the detail.
Mr Bell, who was appointed in January this year, described how the 2000s presented a challenge of ensuring that people continued to build up pension savings.
“Solutions were found, and that should give us confidence for our own challenges today. But … we took too long to find innovation in the face of a chronic problem, rather than a crisis.”
“I agree the level of contributions is an issue, but … today’s problem is, how do we deliver better returns to savers so they can have a decent standard of living in retirement without asking any more that is necessary of their standard of living in the here and now?”
Warning that the damage caused by poor investment returns should not be underestimated, Mr Bell described it as “just as destructive” as pension scheme failures.
“So that, for me, is today’s exam question. We’re making good progress, and I look forward to answering it with all of you over the months and years to come.”
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