Will the coalition's pension reform leave more people better off?

Will 9 out of 10 be better off under the Government's pension reforms? | Full Fact

Mid term review Jan 2013 Coalition and Pensions/Elderly

from  http://www.bbc.co.uk/news/uk-politics-20969488

PENSIONS AND OLDER PEOPLE

Original coalition agreement pledges:

• State pension to rise each year by the highest of earnings, prices and 2.5%
• Phase out default retirement age and raise state pension
• Compensate Equitable Life policy holders
• Protect winter fuel allowances, free TV licences, free bus travel, and free eye tests and prescriptions for older people

What coalition says it's achieved:

• "Triple lock" plan on state pension now in place
• State pension age to increase to 66 by 2020 and 68 by 2028
• Age-related universal benefits protected
• Default retirement age abolished
• Payments to Equitable Life policy holders have begun

Labour's verdict on coalition so far:

• Winter fuel allowances being cut
• Pensioners will lose out after tax changes

Coalition's mid-term 'to do' list:

• Expand automatic enrolment in workplace pensions
• Reform public sector pensions
• Carry through planned changes to state pension age
• Continue to protect age-related universal benefits
• Increase incentives for pension savings

BBC political reporter Justin Parkinson says: The coalition says its changes to the system, including raising the retirement age for men and women, are aimed at making the pensions system "sustainable". The "triple lock" guarantee for increases in payments gets top billing in this section of the audit. The protection of benefits like the winter fuel allowance is vaunted. But there are increasing signs that the universal element of age-related benefits will be targeted after the next election.

Should wealthy pensioners get their benefits stopped or is a more thorough reform of the benefits system needed?

Listen here (10 min)
http://news.bbc.co.uk/today/hi/today/newsid_9755000/9755010.stm

The Liberal Democrat leader Nick Clegg has suggested that wealthy pensioners should be stripped of some of the state benefits they all get now, regardless of how well-off they are.

But how much money would this save? And should the government spread the net wider.

"We are going to protect these pensioners' benefits and it is crucial we keep that promise," Conservative MP Mark Reckless told Today presenter John Humphrys.

"The cost of what (Nick Clegg) is suggesting, of having a great new bureaucracy to administer in effect a wealth tax on pensioners... the costs of that would be enormous, far, far greater than anything which would be raised.

"Pensioners have really suffered. Their income from investments and annuities are sharply down. The key issue is we don't want to be means-testing pensioners in this way."

The government's "poverty czar", the Labour MP Frank Field, argued that "we need a new contract with voters" with entry to the welfare and health system coming through contributions"If we don't do anything at all, the cost of the NHS and the payment of current pensions will double as a proportion of our national income.

"I think we need a new contract with voters to say this is where the expenditure you want is going to take us. Can we do a new tax deal with you to ensure the bills will be paid? They are clearly not going to do it through income tax," he added.

"For most of the post-war years, we have wanted governments that spent money we have not been prepared to give them in taxation. The long-term trend, as we age... our health bills and pension bills will totally distort public expenditure."

When will you qualify for a state pension?

http://pensions-service.direct.gov.uk/en/state-pension-age-calculator/home.asp

Glossary/mini textbook on various Welfare issues

Thanks to Aisling for reminding me about this...
Introduction to Social Policy:

'via Blog this'

State Pension Age - when is it going up?

State Pension age is going up to 68 as suggested in class but not for some time (on current rules) though the move to older pension ages has been accelerating over the last 5 years or so.

68 years old will be the qualifying age for public sector (teachers, civil servants etc.) pensions if the coalition gets its way. This would come in almost immediately as and when the legislation is past.

Remember the difference - everyone who pays NI is eligible for state pensions, only public sector workers are eligible for public sector pensions.

See here for more details.


State Pension Calculator.