Magazine article New Statesman (1996)

Higher Pensions, More Poverty

Magazine article New Statesman (1996)

Higher Pensions, More Poverty

Article excerpt

In the 1990s, the Tortes told us (through the musings of Michael Portillo) that we'd all better start saving for our retirement because the state pension would eventually become "nugatory". Now they promise the reverse: to peg pensions to average earnings rather than prices. This pledge taps into a growing yearning by the middle classes, as well as the poor, in these days of uncertain stock markets and deteriorating company pension schemes: to have at least some pension they can rely on. What the Conservatives have not mentioned, however, is that their proposals could actually lead to a substantial increase in poverty.

At present, single pensioners get 78 [pounds sterling] a week in state pension, but if their other income is low they can apply for a top-up or "pension credit", guaranteed to raise their total income to at least 102 [pounds sterling]. Under the present government's policies, this means-tested element will become ever more important, as the 78 [pounds sterling] is being uprated with prices only, but the 102 [pounds sterling] rises with average earnings (for the current parliament at least). The Tortes propose simply to reverse this formula: the automatic pension gets uprated with earnings while the means-tested level is allowed to stagnate in real terms, rising only with inflation. This would gradually reduce the means-tested dement, until eventually (probably in the early 2020s) the state pension catches up with the minimum income guarantee, and means-testing is no longer needed. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.