Dutch-style collective pensions have emerged as a most popular option with the British public for retirement saving, a think-tank said today.
Collective pensions allow workers to pool their savings and share risk. They are used in the Netherlands and Denmark but are not currently able to operate in the UK. However, they are one of the options being considered by the Department for Work and Pensions following its defined ambition consultation.
The Institute for Public Policy Research conducted a series of focus groups to gauge attitudes to collective schemes. These found that the public liked the ideas of sharing risks and rewards with other scheme members.
Imogen Parker, IPPR research fellow, said: 'Public support for collective pensions is clear. People don't want the responsibility of choosing an investment fund and shopping around the best deal when it comes to buying an annuity.
'They think it fairer to get an income directly from a collective scheme while sharing future risks with other members.'
The IPPR argued that collective schemes would lead to much higher incomes in retirement. The lower fees that are applied to such schemes - an average of 0.15% in the Netherlands - would also put more money in the pockets of scheme members.
'Restoring public trust in pensions is vital. We need a radical re-think of how the pension system works to encourage people to save for their old age. Collective pensions are a fundamental part of provision in the Netherlands and Denmark, and they could work here,' said Parker.
