The Liberal Democrats have called for urgent reforms to be made to Britain’s pension system.

Speaking ahead of the UK Pensions Experts Conference, party leader Charles Kennedy said the country could not afford any “further dithering and delay” on pensions reform and urged the Prime Minister to introduce reform legislation in this Parliament.

Mr Kennedy said that the Liberal Democrats were committed to ending “the complexities and unfairness” of means testing. He said that the party wanted a range of incentives to encourage people to take out second pensions, instead of compulsory pensions.

Mr Kennedy also said that pensions should be made more “politician proof” by introducing an Independent Pensions Authority and by ensuring that second pensions are private, rather than state owned.

The Liberal Democrat leader said: “Means-testing has helped create a pensions system, which is in a complete muddle – both complex and ineffective.

“Millions of our pensioners still live in poverty, many women end up with insultingly small pensions and the system is now so complex that few people can understand it.

“People are losing confidence in the stability and security of pensions. They worry that the state will not honour its commitments. And they worry about the risks involved in investing heavily in a private pension.”

Mr Kennedy said that the fairest system would be the introduction of a Citizens Pension, with people also encouraged to plan and save for their retirement.

Mr Kennedy said: “Our vision is that as many people as possible should have their own additional pensions, on top of the Citizen’s Pension, and not at the whim of the government of the day.”

(KMcA/SP)