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Focus on Citizen's Pension
There
has been considerable interest recently in pensions, and
some attention has been given to the contribution which
a Citizen's Pension would make to income maintenance in
old age. To replace National Insurance Retirement Pensions
with a Citizen's Pension would provide all elderly people
with a floor on which to build with private and employers'
pension schemes; and if the Citizen's Pension were to be
set at subsistence level (say at the Minimum Income Guarantee
level) then, provided a means-tested Housing Benefit remained
in place, no further means-testing would be required and
there would no longer be the same disincentive to save for
old age as there is now.
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Wednesday
30th November
The Turner Report
The
Second Report of the Pensions Commission (the Turner Report)
was published today, and it recommends "reforms to
make the state system less means-tested and closer to universal."
The
Citizen's Income Trust has issued a press release. Click
here to see it.
To
see the report, click
here.
•
To see Plaid Cymru's pensions policy proposals, click
here.
•
29th
December 2004
The
Guardian carries news of the Secretary of State's intention
to establish a Citizen's Pension.
'Before
unveiling his department's five-year plan - the first installment
of which is due next week - Mr Johnson told the Guardian
that he is opposed to "patching up" the existing
state pension system.
Instead
he wants the cabinet to accept a radical shift to a non-contributory
citizens' pension, similar to a Liberal Democrat scheme,
though more ambitious. "I am very interested in getting
a consensus around a solution," he says.'
To
read the article, click
here.
•
4th
December 2004
The
Telegraph publishes an interview with Alan Johnson, Secretary
of State for Work and Pensions, in which he expresses serious
interest in a Citizen's Pension.
To
see the Telegraph's article, click
here; and here
•
3rd
December 2004
The
National Association of Pension Funds has again expressed
the view that a Citizen's Pension would be the best foundation
for retirement income.
A
simple new Citizen’s Pension, worth £105 a week,
could be introduced by 2010 under proposals published on
the 3rd December by the National Association of Pension
Funds (NAPF).
The
Citizen’s Pension was proposed over two years ago by
the NAPF, to replace the present tangle of state provision
with a single, universal, flat rate payment worth at least
£105 a week at current prices and rising in line with
earnings.
For
further information from NAPF click
here. The report was prepared for NAPF by the Pensions
Policy Institute. For their press release click
here; and to see the report click
here.
•
12th
November 2004
The
House of Lords has debated a report issued by the Select
Committee on Economic Affairs on Aspects of the Economics
of an Ageing Population. To the see the report, click
here. The report recommends: "11.45. As a top priority,
the Government should consider introducing a non-means-tested
state pension paid on the basis of citizenship to all persons
of pension age. We believe that the provision of this baseline
state pension is a necessary element for the development
of a more extensive system of voluntary pension saving in
the United Kingdom." To see the debate click
here.
•
14th October 2004
The
Secretary of State for Work and Pensions, Alan Johnson,
expresses support for a Citizen's Pension
Alan
Johnson has voiced support for a citizen's pension based
on residence rather than contributions. He told the Commons
he thought it a "really interesting" idea and
that it "deserves much closer examination".
"I
have an absolutely open mind, veering towards being positive,"
the new Cabinet minister said.
He
also confirmed that there is no plan to continue with means
tested pensions credits indefinitely.
For
further details, see the ePolitix
website
Archive
material:
•
The
Pensions Policy Institute has studied the Citizen's Pension
currently operating in New Zealand and has written a report,
Citizen's
Pension: Lessons from New Zealand. Subsequently
they have published a summary
of the seminars and other consultations which they have
held on the report. A particular problem discussed was how
to recognise the rights which people have accrued in state
earnings related pensions and contracted-out pension schemes,
and the institute has prepared a paper
on this complex issue. More recent work on transition issues
has now been published: click
here to see it; and on the 5th October 2004 the PPI
held a debate on the savings benefits from a Citizen's Pension.
To see a summary of the debate, click
here. (The institute's 2003 paper on state pension reform
can be seen here).
For a summary of the PPI's work up to November 2004, click
here.
•
The
National Association of Pension Funds has recommended a
Citizen's Pension of £100 per week for each individual.
Click here to see a summary
of their recommendations.
•
The
Association of British Insurers has recently published the
results of research which show that the public backs their
call for reform of State Pensions to boost saving . Latest
results from the ABI’s quarterly Pensions and Savings
Index show that reform of Britain’s state pension and
benefits system would motivate more people to invest their
own money in saving for a pension and help close Britain’s
£27bn savings gap. 50% of those questioned in the
ABI’s latest survey said that they would be persuaded
to start saving or increase their saving for retirement
if the Government promised “that they would not reduce
your entitlement to state benefits because of your pension.”
For further details, see http://www.abi.org.uk/newsreleases/default.asp
and go to press release no. 86/04 issued on the 27th September
2004.
•
Alan
Pickering has written a report for the Adam Smith Institute
entitled Pensions
Policy: How Government can get us saving again. The
report recommends a universal state pension of 40% of national
average earnings.
•
In
a recent report, the National Consumer Council says this:
"Government should offer an adequate, secure and simple
state pension. The current, contributory system is complex
and not widely understood. It does not work well for people
with gaps in their work history or low-paid part-time jobs.
Consideration should be given to the idea of a citizen’s
pension, where everyone receives the same basic state pension
as an entitlement (as recommended by a recent report from
the House of Lords Select Committee on Economic Affairs,
Aspects of the economics of an ageing population, Volume
1 - Report, 2003, Chapter 8).This would be simpler to administer
and would provide a secure foundation for further pension
saving." To see the report, click here.
•
The
National Pensioners Convention has published a 'Pensioners'
manifesto' on the basis of consultation amongst older people
and their organisations. The main demand is a £105
a week basic state pension for all men and women, to rise
every year in line with average earnings. For more on the
National Pensioners Convention see their website at www.natpencon.org.uk.
•
The
Scottish National Party was an early advocate of a Citizen's
Pension. To see their current suggestions, click
here.
•
To
see the Government's Green Paper on pensions, click here.
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