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Welfare Reform on the Web (October 2000): Pensions - UK

A GUARANTEE TO END PENSIONER POVERTY

F. Field

Financial Times, Aug. 3rd 2000, p. 17

Argues for a state pension based on a compulsory social insurance scheme. Contributions would be earnings - related, but pensions would be paid on a flat-rate basis. In this way the contributions off the higher paid would subsidise the pensions of the lower paid. The pension would be uprated in line with earnings.

PENSIONER POVERTY

Social Security Committee

London: TSO, 2000 (House of Commons papers, Session 1999/2000; HC 606)

Recommends an increase in the basic state pension sooner rather than later, and its uprating in line with earnings rather than prices. Acknowledges that the latter is only possible if people are willing to pay higher taxes and national insurance contributions. Proposes that extra help should be targeted on the oldest pensioners, who are also likely to be the poorest, and that the basic state pension for those over 80 should be raised to the same level as the Minimum Guaranteed Income. Also suggests that the possibility of compelling self-employed people to take out a second pension should be investigated.

STATE EARNINGS - RELATED PENSION SCHEME: THE FAILURE TO INFORM THE PUBLIC ABOUT REDUCED PENSION RIGHTS FOR WIDOWS AND WIDOWERS

Committee of Public Accounts

London: TSO, 2000 (House of Commons papers, Session 1999/2000; HC 401)

Draws three main conclusions:

  • Firstly, declares that the failure for 10 years to advertise the change to the inheritance of SERPS was due to a systemic failure of administration in the department of Social Security and the Benefits Agency. There needs to be a fundamental improvement in attitudes towards customer service.
  • Secondly, there is concern that the DSS still does not accept that it is responsible for informing people about the impact of legislative change even when administering a contributory pension scheme. This is unacceptable.
  • Thirdly, recommends that the scheme to compensate and protect those misled should be clear, well advertised, not bureaucratic, and should not be subject to an excessively early cut off date.
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