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Two-tier pensions to be urged by review

Sunday 21 January 1996 19:02 EST
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A radical plan for a two-tier pension scheme is due to be unveiled this week as pressure grows for reform of the provision of retirement income.

After a two-year study, the Retirement Income Inquiry is expected to recommend tomorrow a safety net state pension backed up by a top-up scheme with compulsory minimum contributions from employees and employers.

Publication of the independent inquiry's report coincides with a survey showing that millions of Britons of working age have no idea what their pension is likely to be.

Yesterday Frank Field, the Labour chairman of the Commons social security committee who has proposed radical welfare reform, warned that people should be made to set aside 15 per cent of their income for pensions.

Writing in the Sunday Mirror, he said: "We are spending fewer years at work, retiring earlier and living longer. We will have adequate pensions only if we set aside more of today's income for tomorrow."

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