On the 12th December, the Pension’s Committee debated a petition, that was signed by more than 110,000 people, calling on the Government to increase the state pension to £380 a week (£19,760 per year), and to lower the retirement age back to 60 (currently 66).
Currently the basis State pension is £141.85 per week (£7,376 per year) ; and the new Single-tier State Pension, introduced from April 2016, is £185.15 a week (£9,627 per year).
The UK State Pension is one of the lowest in the developed world and the Government needs to seriously consider how it will support those who rely upon it. The need to claim additional support, such as pension credit, is not working, with many of those entitled to this extra money missing out. Older people want to play their part in society including supporting local economies but few can afford to do so.
Lisa Ray, General Secretary of the CSPA comments: “The average pension in the Civil Service is only £8,000 and so there is a reliance on the state pension to top that up. There are many pensioners who are trying to survive on the state pension alone. CSPA believes that any increase in state pension age should be subject to reviews of healthy life expectancy.”
During the debate, Marsha De Cordova MP (Labour for Battersea) said poverty and inequality among pensioners is rising and existing financial support does not go far enough as the cost of living increases further. She also points out that women, disabled people and black, Asian and ethnic minority pensioner groups are disproportionately affected as, on average, they have lower paying-jobs and will be less likely to have built up a sizeable workplace over their working life. She goes on to criticise the complex application process to access pension credit. Finally, she calls on the Government to explore alternative ways to fund the pension system, suggesting we look at systems in other countries to develop a more effective funding mechanism.
The Parliamentary Under-Secretary of State for Work and Pensions, Laura Trott MP says the Government disagrees with both of the petition’s propositions. On increasing the state pension to £380 a week, she says this would be unaffordable and most pensioners are able to rely on a private pension to top up the state pension.
She said that the Government provides around £67 billion each year in tax relief to boost private retirement savings and called on people to consider all aspects of Government support. She also affirmed that there are no plans to reduce the state pension age to 60 as there needs to be: “the right balance between affordability, the sustainability of the state pension and fairness between generations.”