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2-4 June 2009

 
Pensioners' leader gives initial
response to
Pension Commission Report
Rodney Bickerstaffe, president of Britain's biggest pensioner organisation - the National Pensioners Convention - gave the following response to the release of the Pension Commission's interim report:
 
Mr Bickerstaffe said: "We welcome the Pension Commission report and its breadth of data. It confirms what we have been saying for some time; that Britain has one of the least generous state pension systems in the developed world and a private pensions industry that is in decline. Their report has also revealed that over the last few years the burden of responsibility for pension provision has shifted from the state, employers and the private sector to the individual. This cannot be allowed to continue."
 
 
"The interesting thing is that a consensus is now emerging amongst many different and diverse groups, who all agree that we need a much bigger basic state pension for every older person, that is linked to earnings and free from means-testing. Britain has the fourth strongest economy in the world and if we put our money into providing a secure and improved state pension, we wouldn't have to worry about the prospect of millions - mainly women - facing poverty in retirement both now and in the future. We intend to be very active in the consultation process and hope the government will give it a full response.
 
Minister hints at pension switch

The Guardian

The government will today face intense pressure to signal a shift away from means-tested pensions in the face of the independent Turner commission report's startling finding that Britain faces a ?57bn annual pensions gap.

The commission will also report pensions savings have been falling, not rising, since Labour was elected in 1997.

Critics claim the government has discouraged a savings culture by a mix of taxes and excessive reliance on means-tested credits.

Some cabinet ministers privately back this analysis, even if they accept that the chancellor, Gordon Brown, was right initially to target cash at the poorest pensioners, rather than at the basic pension or occupational pensions.

The pensions minister, Malcolm Wicks, yesterday appeared to signal a willingness to rethink policy, saying the year-old pension credit, the main means-tested pension available to the 5.5 million poorest pensioners, was "only a policy for the short and medium term".

The trades unions will again call on the government to respond to the crisis by introducing compulsory contributions by employers, a policy opposed by the CBI and ministers.

The independent commission chaired by the former CBI chief, Adair Turner, was set up in 2003 to investigate the scale of the pensions crisis.

It will warn that if the average retirement age does not change, the ratio of people of working age to each retiree will fall from 3.7 to about 2.1 in the next year, and either pensioner incomes would need to be cut by 43%, or worker and employer contributions would have to rise by 76%.

Although the commission will also examine ways of reviving the rapidly closing "defined benefit" company schemes, which guarantee a fixed future pension, today's interim report will not set out specific policy recommendations, arguably relieving ministers of the need to advance unpalatable proposals ahead of the general election.

In a speech on his third term agenda, the prime minister yesterday claimed that he was looking for an all-party consensus on pensions, adding the challenge was to provide a system which combined decent provision for those without savings with incentives for all in work to "provide for themselves".

The opposition parties will claim the savings gap detailed by the Turner commission has not just been caused by demographics, or the decline in the stock market, but by steps taken by government that have discouraged savings.

The Tory pensions spokesman, David Willetts, said Mr Blair had to decide whether to increase the basic state pension or have "large numbers of pensioners dependent on income-related benefits".

Mr Willetts also criticised ministers for failing to compile accurate figures, claimed that an elementary statistical howler was committed when the Office of National Statistics claimed wrongly that contributions to non-state pensions grew from ?50bn in 1997 to ?86bn in 2001.

"One of the reasons why the government has failed to recognise the scale of the crisis, and why the policy response has been so inadequate is because they have been navigating with false data," he said.

The work and pensions secretary, Alan Johnson, in the Commons yesterday defended the principle of means-testing, at least in the immediate future. "It is supposed to be deeply sinful but pensioner poverty is what's deeply sinful. Means-testing is a crucial part of our policy," Mr Johnson said. He added that if the government had put the money it has invested in the means-tested pension credit into the basic state pension instead, every pensioner would have got ?11 a week more but the poorest would be ?30 a week worse off.

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In response to todays Pension Commission's report, Tony Watts Editor of the Mature Times newspaper writes:

"Nothing in today's report surprises me. At Mature Times we've been banging on about the growing crisis in pensions for years now - well before the Commission started work - and it's as plain as the nose on Mr Brown's face that something serious has to be done to avert a crisis for millions of people and for the country at large.
For a start, the country has to find ways of helping the 2.6 million plus people aged between 50 and 65 deemed to be 'economically inactive' back into earning money rather than living on disability or using up their savings.
Most of these people could go back to work - except institutional ageism has made them feel they are on the scrapheap.
Secondly, the nonsense of ?5 billion a year being stripped out of pensions funds has to stop. Who is going to invest in a private pension when it not only performs poorly but when the 'piggy bank' is regularly raided by the Chancellor? 

Thirdly, we have to recognise that a decent State pension is the only answer for millions of people, and that this has to be set at a level well above the poverty line, and it has to be properly funded and linked to earnings, not the RPI which simply does not reflect what older people spend their money on.

All this calls for joined up thinking - no one of these solutions will work on its own: help people back to work, restore faith in private pensions and re-establish the role of the State pension.  We need action now - not in two years time.
And whatever party can put together a workable solution will be in pole position to win the votes of Britain's 11 million pensioners at the next election - and probably the votes of the 7 million people heading towards retirement in the next 15 years.

Grey power will win the next election - and it would be a foolish party leader who takes the votes of older people for granted.

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Read the articles on various newspapers:

Read the article on the Independent web site

The Sun - page 2

Mirror - page 10

Express - page 8, 9

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