Rachel Reeves, shadow secretary of state for work and pensions, today (29 May) pledged to extend pensions auto-enrolment to the low paid who are missing out.
Ms Reeves also said Labour would set up a commission under David Blake, director of the Pensions Institute, to consider the future of pensions in the wake of the Budget changes.
Frances O’Grady, general secretary of the TUC, said: “The chancellor tore up the way that people turn their savings into pensions income in the Budget, but did nothing to put anything in its place.
“But what people want in retirement is a predictable regular income, and the chancellor’s proposals will undermine the good ways that this can be done as well as the rip-offs.
“That is why we welcome the new commission, to be chaired by professor David Blake, to examine the future of pensions.”
Pete Glancy, head of corporate pensions at Scottish Widows, said Labour’s proposal was a step in the right direction but added the issue of band earnings also needs to be examined to improve the retirement income of lower paid workers.
He said: “If an employer bases contributions on band earnings rather than full earnings, then someone on a £10,000 salary would get their 8 per cent contribution based on earnings of around £4,000.
“Basing contributions on full earnings could give a significant boost to individual pension savings and simplify the automatic enrolment process for employers.
“Further measures to improve long term saving might include widening the scope for paying into a pension outside of paid employment and allowing couples to plan for retirement together to give women more flexibility in building up their own pension savings.”
