Commenting on speculation ahead of the Pensions Commission report due out later this month, David Frost, Director General of the British Chambers of Commerce (BCC), said:

“The BCC welcomes a number of the ideas arising from speculation ahead of the Pensions Commission’s Second Report. In particular we welcome the concept of a higher basic state pension with less reliance on means testing as this should provide a better foundation for greater private pension saving.

“Raising the state pension age will be a crucial element of paying for an increased basic state pension and we would fully support the Commission if they were to recommend this. However the Government’s decision to allow existing public sector workers to retire at 60 is a great pity. This has sent out confused messages to the public on the need to retire later and could make it difficult to convince individuals of the need to wait longer for their state pension.

“BCC remains concerned over how changes to pensions will be paid for. We do not want to see an increase in business taxation to pay for any reform of the state pension. We hope the Commission will have recognised these concerns.

“We do not want to see employers being forced to pay into pensions for employees as part of any potential national savings plan. This would essentially be a tax increase at a time when our firms face huge global competitive pressures and business taxes have already risen in recent years. Our survey found that one-fifth of businesses would be forced to lay-off staff if they were required to make a pension contribution for employees.”