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Welfare Reform on the Web (June 1999): Pensions - UK

ELDERLY HIT AT FAILURE TO EXTEND 10P TAX RATE TO SAVINGS

J. Eaglesham
Financial Times, March 11th 1999, p. 11

The government was accused of exaggerating the help the Budget will give to pensioners after it emerged that thousands on low incomes will not benefit from the 10p income tax rate. The new rate is limited to income from employment. Interest from savings is excluded and will be taxed at 20%.

GOVERNMENT ADVISERS WARN ON PENSIONS REVAMP

N. Timmins
Financial Times, March 5th 1999, p. 7.

Reports the Pension Provision Group's response to the government's proposals for the reform of the pension system. They criticise the proliferation of tax regimes for pensions involved in the plans and warn that employers might start to pull out of traditional occupational pensions for moderate earners. The Group also pointed out that few people would qualify for a full flat-rate second state pension under the plans because it required 49 years at work. The existence of Housing Benefit meant that substantial reliance of means-tested benefits would continue, and that there would be a tendency for individuals to slip back quite quickly onto means-tested benefits even if they retired slightly above that level.

PENSION REFORM MAY DO ENORMOUS DAMAGE

N. Timmins
Financial Times, March 12th 1999, p. 10.

Points out flaws in the government's pension reform plans. Given the unwillingness of the government to make pension saving compulsory, large numbers of people will continue to depend on means-tested benefits. Because the minimum pension guarantee will be linked to earnings, its value will rise faster than other pension provision which is normally linked to prices. The proposed new stakeholder pensions could undermine occupational schemes.

PENSIONERS FACE TO FACE WITH GHOST OF POLICY PAST

N. Timmins
Financial Times, Feb. 18th 1999, p. 7.

Social security officials are being accused of maladministration over failure to warn Serps contributors about the implications of a Tory measure to halve survivors benefits. The Department of Social Security may now face compensation claims from individuals who took financial decisions based on the false premise that Serps would pay out a full pension to survivors.

REDRESS CLAIMED BY 2,000 FOR STATE PENSION 'MIS-SALE'.

N. Timmins
Financial Times, March 18th 1999, p. 10

Department of Social Security has admitted that more than 2,000 people have claimed compensation for having been mis-advised over their state earnings related pension rights.

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