Pensions
Every pensioner must have a decent pension and a comfortable retirement.
| The Peoples Party will: |
|---|
| establish a basic state pension of £500 per week, irrespective of previous national insurance contributions, payable at 75 and over |
| allow people to choose if they wish to retire earlier than 75, fixing their pension payment at a level on the retirement scale at the age of retirement |
| raising the bottom age and the top of the scale by one year every five years. |
| exempt pensioners at 75 and over from education, health and council taxes. The abolition of taxes on savings will also end the double taxation of pensioners’ incomes |
| change the way state pensions are administered by establishing independent pension funds that will issue debt to finance pension payments and then reclaim the total value of state pensions paid from an individual’s estate. The Government would make up the shortfall between amounts paid and those reclaimed |
| provide free social care or vouchers to cover the cost of care |
The current state pension system is a mess. The basic pension is insufficient for people to live on and, for many, has to be topped up by benefits.
The full UK state pension, which many do not receive, is one of the worst in the developed world, amounting to less than a third of average earnings, compared to two thirds or better elsewhere.
In addition, a minority, primarily retired public sector employees, receive “unfunded” pensions, averaging £200 a week that rise with inflation. The majority, who have “funded” private pensions receive around £60 a week, an amount whose value is eroded steadily by inflation.
Reforming the current pensions system is controversial but essential to make it sustainable. It requires addressing the fact that successive governments have deceived people into thinking they were paying into a pension fund through national insurance contributions.
Unfortunately, no such fund was created. The money has not been invested. Instead, like some rogue businessmen, governments have spent the money paying current pensioners and other public expenditures.
As people live longer, the overall cost of state pensions rises, with proportionately fewer workers to fund pensions. Without reform, either taxes have to go up, or the real value of pensions is reduced further.
The solution is to encourage people to work longer in return for a higher pension when they retire. It is also to introduce honesty in the way pensions are funded, with the cost of pensions being reclaimed, where possible, from estates on death.
