Under Attack: #UKStatePension

It was being reported this weekend that the UK Government is considering breaking a manifesto pledge on the triple lock for state pensions. The triple-lock was introduced in 2011 by the Conservative-Liberal democrat coalition government to check the decline in the real value of the state pension. Under the triple-lock, the UK’s state pension rises by a minimum of either 2.5%, the rate of inflation or average earnings growth, whichever is largest. In 2019, the Conservatives election manifesto said that they would keep the triple lock, which retains the value of the state pension ands also gradually increases its value in line with the UK economy.

Depending upon the circumstances, the UK’s 12.7 million retirees receive a state pension of between £134.25 and £175.20 per week – i.e. in the range of £7,000 and £9,110 a year. In comparison, the national minimum wage for someone over the age of 25 is £8.72 per hour i.e. around £17,000 a year. Many retirees therefore are living on almost half of the minimum wage.

The UK state pension is around 29% of average earnings, the lowest amongst industrialised nations, compared to the average of 63% in OECD countries. One method used by the OECD to compare the value of state pensions across the world looks at Pension Replacement Rates. This measures income from State Pension as a percentage of people’s pre-retirement take home pay. Figures from the OECD Pensions at a Glance for 2019 put the UK at the bottom of the table on this measure.

The proportion of retirees living in severe poverty in the UK is five times what it was in 1986. This is despite the UK requiring employees to save for their retirement through work related pension schemes. Inevitably, low wages have had the result that there are low savings made via private pensions. This has meant that for poorly paid employees, the state pension remains likely to be the biggest source of income in their retirement.

The trigger for possible abandonment of the triple-lock is the current furlough scheme under which the government is paying 80% of wages, up to a maximum of £2,500 a month, for around 9 million employees. When the scheme ends, and employees return to their jobs average earnings may dramatically increase which would trigger a big rise in state pension. It is claimed that removing the triple lock could save the government £10bn over 48 months. Although this sounds a lot, last year the government provided a subsidy of £7.1bn to privatised railways companies.

A big rise in the state pension in line with expected post-COVID wage rises could dramatically reduce pensioner poverty. Removing the ‘triple lock’ makes this a lot less likely.

We could afford to keep the triple-lock in place. The state pension being paid out of the UK’s National Insurance Contributions (NIC) which are accumulated in the National Insurance Fund (NIF). On the 31st. March 2019, the NIF had an accumulated surplus of £30bn. Maybe it is time to start spending some of this surplus. HM Revenue and Customs (HMRC) also admits that it fails to collect around £34bn-£35bn each year due to tax avoidance, evasion and errors. Other studies  put the amounts at between £58.6bn and £122bn a year. A focus on tax avoidance/evasion could easily raise plenty to provide decent pensions.

Rather than damaging an already poor state pension scheme, the government needs to ensure that eradication of poverty and a decent pension are part of the UK’s recovery plan. We need to take action now to ensure that current and future UK pensioners do not continue in potentially worsening poverty.

It’s time to write to your MP’s.

And I have not even mentioned the plight of WASPI Women.

Older People, Scams and Fraud

50percent_scam

People lose an estimated £10bn to fraud every year. People of all ages and backgrounds are victims. However, older people are over- represented as victims of particular frauds, including pension and investment scams, postal scams, doorstep scams and telephone scams. Some older people are especially at risk, either because they are deliberately targeted or because they are vulnerable, for example if they are bereaved, lonely or living with dementia. The financial and health impacts can be devastating. Consider for example that people defrauded in their own homes are 2.5 times more likely to either die or go into residential care within a year.
OK, so I have made my point, but why has this come to my attention this week. Age UK and Action Fraud (who are the UK’s National Fraud and Cyber Crime Reporting centre), have joined forces to launch new pilot programme to combat scams targeting older Londoners. The new programme will initially be piloted in London with the aim of creating a prevention model that can be rolled out nationally. The programme aims to support older victims, and raise awareness of scams more widely to help empower older people to feel more confident at spotting and avoiding scams.
So I am not living anywhere near London. I am disappointed there is only one pilot site but happy that at least something is being done and thought, ‘I could do my bit to raise awareness particularly given the health consequences of being scammed.’ You can find out more about these from a great little Age UK booklet called “Older People Frauds and Scams” which you can download HERE, it was released in October 2017.
If you want to know more about the scams prevention and victim support pilot programme just click the blue link.
There is also a  video accompanying the new programme which you can access on this  Age UK News page
Which? on their elderly care pages also have a link to an advice guide and directory on their Scams and Older People page. There is also a nice little booklet from Citizens Advice Scotland from 2014; Called “Scammed and Dangerous: The Impact of Fraudsters” just in case you need to more about this problem and its impact up here in Scotland
Now all this information is no good just posted here so if you read this far, please share this with the people you know who will benefit. (That’s just about everyone!)

What’s Happened to my Pension and the Myth of Weight Loss

Pension Form

Again this week I am picking two very disparate stories. One has been widely reported within the UK and one has received much less attention.

So firstly this week two separate reports for the government released this week suggest that millions of people are probably going to have to work longer to qualify for their UK state pension. While that is not a surprise, if you have been following world trends, UK demographics have attended any of my modules or follow this blog the speed at which it might happen and who might be affected probably will be. In a worst case scenario, planned changes which are not due to take effect until 2044, it could be brought in as soon as 2028, affecting those now in their late 50s. (Mind you the worst case scenario means that  you will be spending 32% of your adult life in retirement so clearly you will be expecting to live longer). The implications for the poorest, especially women as usual, are worrying. For a lot more information on UK Pensions, see this BBC news report, State pension age could be raised to 70

This month the Malnutrition Task Force also launched a Campaign aimed at older people with small appetites that focuses on keeping a healthy weight in later life.

As part of their campaign, the task force has also released two guides to tackling unhealthy weightloss. One is aimed at those in later life and the other at carers. They are packed with tips and advice on how to keep to a healthy weight in later life. For instance, did you know that if you have a small appetite, eating small meals or snacks six times a day may be more manageable than three big meals?

To find out more go to Malnutrition Task Force Small Appetite Campaign