Tackling the "Pension Crunch" should not be viewed as an unwelcome cost challenge by an incoming government but as part of the solution to future fiscal and economic stability for the UK, according to AEGON's pensions election manifesto.

Whichever party wins the election must make tough choices to deal with the demands of an ageing population, says the insurance company, and these decisions should not be made at the expense of focusing on the aftermath of the credit crunch instead.

The Pensions Crunch: proposals for change outlines AEGON's policy proposals for the next Government to adopt, and says it is vital that measures which are taken up to plug short-term public finances do not affect longer-term finances. The current savings framework, AEGON said, is unsustainable, and a 'comprehensive rethink' of how to encourage saving and help people make their most of assets in later years is necessary.

The manifesto argues that in the first 100 days of power, a new Government should call an immediate halt to the 'salami slicing' of pensions tax relief and undertake a review of the automatic enrolment arrangements which are due for introduction in 2012. An urgent review into public sector pensions to bring unfunded liabilities under control is also necessary.

AEGON also urges Parliament to review the entire retirement landscape and ensure that more people can have access to financial advice.

"Pensions policy is more important now than at any time before due to the pressures on the economy from an ageing population," explained Otto Thoresen, AEGON UK chief executive. "Longevity isn't a choice for the UK, it's a certainty. And the question isn't whether or when we start to pay for it, but how we start to do so now."

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