Pensions and older people
The Government believes that people deserve dignity and respect in old age, and that they should be provided with the support they need. That means safeguarding key benefits and pensions, and taking action to make it easier for older people to work or volunteer.
- We will restore the earnings link for the basic state pension from April 2011, with a ‘triple guarantee’ that pensions are raised by the higher of earnings, prices or 2.5%.
- We will commit to establishing an independent commission to review the long-term affordability of public sector pensions, while protecting accrued rights.
- We will phase out the default retirement age and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women. We will end the rules requiring compulsory annuitisation at 75.
- We will implement the Parliamentary and Health Ombudsman’s recommendation to make fair and transparent payments to Equitable Life policy holders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure.
- We will explore the potential to give people greater flexibility in accessing part of their personal pension fund early.
- We will protect key benefits for older people such as the winter fuel allowance, free TV licences, free bus travel, and free eye tests and prescriptions.
- We will simplify the rules and regulations relating to pensions to help reinvigorate occupational pensions, encouraging companies to offer high-quality pensions to all employees, and we will work with business and the industry to support auto enrolment.
In line with raising the income tax threshold to £10,000 I would additionally provide that the first £5000 of any pension be tax free giving a threshold of £15,000 for those living on pensions.
I strongly support restoring the link between pensions and earnings / prices and maintaining free prescriptions, eye test, bus travel, TV licences, winter fuel allowance. I would add to this list be introducing free dentisty.
The existing rules that say only 25% of pension savings can be taken as a tax free sum, should be reviewed, allowing the whole of the sum to be taken in cash. The existing rules at least should be reviewed so that once an annuity has begun, at least 75% of the remaining funds on the death of the recipient should be provide to their surviving partner or to their estate. The current rule where I could amass a pension fund of £100,000, take £25,000 cash and an annuity, to die after 1 year and leave the insurance company with almost £75,000 but my widow with nothing is just not right
Agree that the winter fuel allowance and TV allowance could be taxed rather than means-tested.
We give our winter fuel payment to Crisis and I know many others who do the same for that or a similar charity.
Priority needs to be given to the support and care of the incapacitated elderly, especially those who have no support system of family or friends to help them.
Under no circumstances should anyone still working full time after the age of 60 receive the Winter fuel payment. If this is “too difficult” to administer, the second option is to have this benefit “means tested”.
What are you going to do about the ponzi scheme which is public sector pensions?
having worked for 44 years i have a second property which i rent to supplement my pension
i achieved this by working hard and saving my money so i would not be a burden on the state or my family
now i an to be charged 40% capital gains when i sell it
so again it shows that if you can manage your own finances we have to supplement those who dont want to work
a disgrace
you should be ashamed
“We will protect key benefits for older people such as the winter fuel allowance, free TV licences, free bus travel, and free eye tests and prescriptions.”
Anyone who has assets (not including nominated place of residenc) and savings of more than 100K should not be entitled to such benifits.
It is disgusting that poor working class familes fund rich retireees.
The pension age has to rise. There aren’t enough tax payers to support the ageing population.
The pension age for men and women should be equal in a society striving for equality.
Public sector pensions need reforming. Again there aren’t enough tax payers to support the final salary and index linked pensions given to public sector employees. The schemes should be self financing like private sector pensions.
Shame on people who are suggesting the Winter Fuel Payment should be “means tested”. What savings would that achieve on such a small amount of annual benefit? The costs to administer a means tested scheme for this annual benefit would erode any financial savings gained. The salaries of civil servants would be getting the money allocated to the WFP instead of the old people. There would also be the additional costs of lawyers dealing with a complex appeal process on means test decisions.
Less government bureaucracy, please. This payment is a life saver to many old people. Again it is the old and vulnerable who would be asked to undergo the indignity of means testing to receive payment.
There should be a root and branch investigation of the circumstances in which enhancements to Public sector pensions should be granted, seeking to minimise the number of “efficiency of service” and “ill health” pension enhancements paid out. Pensionable Salary should be capped at 50,000 pa for calculation of civil service and LG pensions,
My husband aged 66, has a well-paid full-time job which he hopes to carry on for several years. I am 59 and in full-time employment. We don’t need the winter fuel allowance, nor do we need free bus travel or free prescriptions. None of these payments should be made until you reach 65 – for both men and women. Only people on a low income or with continuing medical problems should have any of these benefits before the age of 65.
Any changes to pensions should not have retro-active impact on those who have contributed to schemes for years – serious consideration should be made of how much money has been spent on protecting those who lost money because they risked it as opposed to those who invested more sensibly.
The families of older people requiring health care should be supported more than the parents of large families receiving multiple child benefit. This is as important a factor in providing for old age as protecting people’s savings.
Access to pensions would be very favourably received by many earlier than 55. Many people carry large debts and one of their main assets is a Personal Pension Fund.
Access to TFC element only would help contribute to alleviating some or all of this debt depending on clients Pension Fund size.
Creditors etc would no doubt be happy to see bad debts repaid sooner. Yes strict criteria must apply eg monies paid from pension fund direct to nominated creditors rather than allow policyholder to succomb to temptation.
Benefits to economy and wider community and family life as financial companies restore some of bad debt balance sheet and individuals can plan for the future without the stress and worry of onerous debts.
Protect public sector pensions. Consider a funded scheme going forwards. I don’t see why public sector workers should suffer from the acts of the reckless bankers/gamblers. Yes, the pensions system is a mess and it does look unfair to those working for companies that have decided not to offer this form of ‘golden’ final salary deferred compensation. In my opinion (as a HRM lecturer who has worked as a pensions specialist and now lectures in this area), I think many companies have pulled out of the old style pensions due to the fact that employees do not fully appreciate the pension as it is so far in the future and the ‘line of sight’ is reduced. They found it expensive and the stock market fluctuations and Brown-led changes helped kill them off. So, good reasons for them to stop the longer-term pensions benefit. They have left employees largely to their own devises and the years to come will see many people wanting to retire but finding they are on a pittance. Coming home to roost soon perhaps. Why does the public sector try to emulate the private, in a time-lagged position and assume they have it right? In fact, recent figures have shown that companies that are using a defined contribution pension system who used to contribute c.6% on average, now have to contribute upwards of 16% of salary in order to provide a decent pension to staff who are becoming wise to the changes. Those who need to please their staff and retain them of course, surely not the average worker who will be suffering on a dire pension arrangement still?!?
So, we come full circle and contribution rates are not much less for the ‘new’ pensions than they are for the ‘golden/old’ pensions. Why change and reduce the positive impact of the secure pensions and put the futures of nurses, teachers, social workers, civil servants out to the gambling bankers?
As a Police officer I pay 11% of income into my pension. Yes it is a generous final salary scheme. The Police pension was recently changed to a less generous one. I think there is merit in closing final salary schemes across the public sector to new entrants and introduce average salary schemes. This could be a standard scheme across the public sector. I would raise contributions for the current employees. WIth a good public sector pension I would not expect a winter fuel allowance and could even question the need for a full state pension.
Scrap public sector final salary pensions as soon as possible. Every day that this inevitable decision is delayed adds more millions to the mountain of debt that our grand children will have to pay. By switching public sector workers to private pensions will also boost the amount of money going into pension funds,thus providing much needed stimulus for the economy,
I welcome the government taking an interest in private pensions and hope to see some reversal of the damage done starting when Gordon Brown was the chancellor.
I would recommend it takes advice from Dr Ros Altmann on pensions as during the last governments tenure my private pension has been screwed.
Its in the government interest to help people have a decent private pension and not have to call for state help in retirement.
To raise the state pension age in due course is understandable, as proposed by Labour. To do it so soon now is heartless. Do not forget that due to the recession very many people were forced to take early retirement, those aged a couple of years below 60 were a soft target for the smooth talking employer and put under massive pressure to leave so that younger (i.e. cheaper and more sackable) staff could be recruited. Those who could not fight this, or did not see the need to, were under the clear promise that the phasing in of the plans to raise state pension age would not adversely affect them, and made their decisions accordingly. I fall into this category – I have no inheritance because my parents had to sell our family home to self fund their care in private nursing homes with zero state help, at £5000 PER MONTH over 10 years until they died of Altzheimers and accompanying complications. I am 58 and would love to work again (within my physical capabilities, which are deteriorating) but where are the jobs? There are none, unless you become an MP!!!! Its well and good saying “work” – but be realistic, there is not a snowballs chance in hell of finding work, especially with so many deserving youngsters unemployed. Free bus passes do not now kick in at age 60 – not a lot of people know that, so the cars need to be kept upon the road until one is 65, council tax and fuel bills are going through the roof, again, no help for those under 65 unless of ciourse they have never worked!!. Plan for your retirement – I did! I left school at 16 and worked every day of my life. Now the goal posts are not only moved, they have been dug up and carried to a totally different field. This is not what we expected. Explain clearly how my next door neighbour at age of 60 gets a free bus pass, but at age of 60 I will not. Explain how at the age of 65 my next door neighbour gets a full state pension, but I will not. Our needs are just as great and identical!!! These proposed measures are cruel. At least then have the decency to back voluntary euthanasia in Parliament so that we can kill ourselves when the money and food runs out and allow others to live – thats what you want isnt it – be honest?
Charlotte – good on you for helping your Gran Nancy to have her say. Excellent.
Sadly so many others have been discriminated against. Unfortunately consultation is a much used but misunderstood concept claimed to be undertaken by statute. If this is an example, then ….
It is time government stopped using the public sector to deflect the flak from the media. Most are loyal and hard working and deserve better from their employers. Yes get rid of the bad ones, but they are the minority.
Most civil servants do not earn large salaries and most are on an 80th scheme. An 80th scheme based on a low income does not provide a pension that people can live on. Very few actually achieve the full 40 years service, especially when you consider the jobs that have been recently lost and the ones that are about to be lost. For many, caring responsibilities reduce service further.
Reducing pension benefits further might be a false economy as more retired civil servants become even more reliant on means tested benefits.
Expecting a higher contribution might be an idea. However, before you can do that, you should consider the 40th scheme that MPs are on.
Politicians and business leaders are quick to condemn low paid civil servants. The hypocrisy is that most of these people will retire on very generous pensions that the ordinary person could only dream of.
If we are really in it together, then we should all be equal. To keep these inequalities will only ensure unrest when the majority are forced to pay for the sins of a few, who remain protected.
I have a final salary pension scheme, no fault of my own, it was there when I started in the NHS 22 years ago. Recent years have seen an increased pressure to challenge these. I would ask that any amendments are gradual and take into consideration my public service, much the same way that capitol gains tax is being resisted by those with alot of assets, same argument.
Equally, if the public sector “needs to become like the privatesector in terms of pensions”, will nurses, bin men etc stat to recieve, private health insurance, share option schemes, bonuses?. Remember those on the shop floor in public service recieve anything like this.
I think its great how you have both a section dedicated to Pensions and older people and also one about the issues surrounding young people….. oh wait.
Raising the pension age is facile and useless; there is endemic ageism in the workplace and staving off retirement for far too many older people will lead to humiliation and poverty. We still need a strong and viable state pension – the stockmarket is too unpredictable longterm to provide sufficient annuities for us all from here on – and public sector workers deserve a stable potential pension, but should be allowed to opt-out if they see richer pickings elsewhere.
With two very small local authority social work and teacher pensions we will not survive the next two years, when we will get our state pensions, unless we retain the winter fuel payment and receive all our low income – tax exempt. All nhs services must remain free including hospital car parking. Utilities cannot go higher especially water in the west country (de nationalising that, all agree, was a big mistake). Free swimming and bus travel for over 60’s will also need protecting. Libraries are relied on by the elderly. The scandel of neglect and cruelty in care service for elderly at home must be remedied as well as the treatment of patients in hospital as statistics has also led to cruelty and neglect. The nhs and care services run on business lines is a lot to blame. It does not take money to have hospital and care services staff who care are sensitive and give dignity and respect, they will also then feel they have dignity and self respect.
The triple guarantee linking state pensions to the higher of average incomes, prices or 2.5% fails to recognise the particular needs of pensioners. A major component of the Retail Prices Index (which has a knock on effect to average incomes as well) is mortgages. Unlike people of working age, most pensioners have paid off their mortgages, so the presence of this within the calculation of the increased cost of living for them is inappropriate. In recent years, for example, as the mortgage rate tumbled, RPI was dragged down by this, and hence pensions were dragged down (resulting in the infamous 75p per week rise) – this made it extremely difficult for them to make ends meet with ever rising energy and council tax bills.
My suggestion is simply this – create an alternative Pensioners’ Retail Prices Index, which accurately models their expenditure – this is likely to be more heavily influenced by things like energy, council tax etc, and far less influenced by traditional RPI stalwarts like mortgages and fuel. As the Office for National Statistics already compiles RPI, it would cost very little extra to compile the Pensioners’ RPI (probably just taking out a few components and reweighting the rest). If state pensions were tied to Pensioners’ RPI, this would accurately reflect their costs of living and ensure that – regardless of what else happened in the economy – they should be able to maintain their standard of living.