Pensions

Every pensioner must have a decent pension and a comfortable retirement.

The Peoples Party must:
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
encourage people to remain economically active for as long as they wish, introducing schemes to facilitate and incentivise employment of older workers
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
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, is topped up by benefits.

The full UK state pension, which lots 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.

For a minority, primarily retired public sector employees, this is supplemented by “unfunded” pensions, averaging £200 a week that rise with inflation.

The majority, who have “funded” private pensions only 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. Despite the state pension’s relative low level, we can’t afford it. Change 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 businessman, successive governments have spent the money paying current pensioners and to help fund general public expenditure.

As people live longer, the overall cost of state pensions rises, with proportionately fewer workers to fund pensions. Without reform, either taxes must 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.