Monday 25 October 2010


At last some good news from the government. It is planning a radical overhaul of the state pension, according to Vince Cable. And although he did not confirm reports in the Daily Mail that it could rise from about £97 a week for a single person to around£140, he did say that the proposals included replacing means-tested pension credits with a flat-rate payment, which would ensure a "decent" retirement.

OK. I don’t think £140 a week means a decent retirement, but it’s a million miles closer than the current state of affairs.

Of course people say that it is too expensive and Britain could never manage this kind of pension. But it fair to say that many continental countries have pension far better than this. It would mean vast savings on means testing calculations.

At the moment, pensions are topped up to £132 a week for the poorest by way of a pensions credit.

The Department for Work and Pensions has said that they will publish proposals later this year.

Of course, it's not going to happen for a long while and the figures may have to be revised. If it takes 5 years to implement, then the £140 will have to be upgraded or those who at present are entitled to all the pension credit will have to take a fall in income!

Labour peer Patricia Hollis, who had called last year for a flat rate pension of £132, was said to be delighted. She rekoned the proposals would be affordable because increases in the state pension age.

Most other commentators thought that the idea was a good one too, with some scepticism from a few who feel that it is a heart-warming story spun to balance out the unfairness of some of last week’s announcements.

The Times said the proposed pension changes were not affordable. Their chief economics person said that the sums didn’t add up and that it would require extra money as it would not pay for itself.

But the National Association of Pension Funds, which described the UK's state pension as the worst in Europe, said it welcomed simplification and less bureaucracy.

I think it is a good start. At £99, the UK state pension is derisory and despicable. I’ve criticised many things that this government has done, and with good reason, but credit where it is due. If it pulls this off it WILL be a progressive move and credit where credit is due. It is to Labour’s eternal shame that it took a Conservative-Liberal government to make this move.

Let’s hope that it is brought in speedily and that the amount at which it is pitched will rise swiftly, to bring us a little closer to all other countries in Europe who treat their old with a little more respect than we do.


  1. Tris

    There are torys involved in this, wait until you see the color of their money, not the sound of their spin.

    Remember the respect agenda, that did not last long, this will go the same way once they have weathered all the bad publicity that is coming their way at present.

  2. Dubbieside:

    Yeah, I know. If it sounds too good to be true it proabably is too good to be true... but I reckon you must never give up hope that something good will come out of this government.

    Just don't put your shirt on it... unless you live somewhere really warm.

  3. Praise?

    #Shock and horror#

    But in all seriousness, the pensions provision system needed massive change. All I can say is good on Cameron for making this a bi-partisan affair. And let us not forget that this is the result of the reviews and efforts of IDS, Frank Field, John Hutton and others - nice to see parliament pulling across petty politics to deliver desperately needed reform.

    Rather puts paid to those that say we cannot afford a minimum 'living income' in this country! --- if we can afford to start to offer coherent and suitable pensions ... why not improve the other areas too?

    More mixed market solutions, less free market dogma. Nice to see Cameron actually changing set Tory views on welfare and retirement issues.

  4. Well, if it works it is good news, but I wonder if he can take the right wing nut jobs with him Dean?

    Mr Fox is waiting in the wings. How he must hate all this Liberal/liberal nonsense... and as you say on your blog, there are folk like John Redwood and Nadine the Nutcase who presumably have followings.

    £140 can only be a start, but I agree with you. Minumum wages keep people alive, and despite the cries of bankruptsy from industry when Blair brought in minimum wages at £3.60 13 years ago, we are all still here.

    But living wages, that is what we should be working for. Living wages and living pensions. People should be able to live, not exist in a rich western country.

    And then, if America has to fight its own wars... well, that might teach them not to start them.

    I thought you'd probably need a stiff drink after reading it Dean. But rest assured I wasn't trying to give you a heart attack. ;)

  5. PS Dean... you see, when the Tories do something right, I can be nice about them.... It's not all Tory bashing on this blog. Just foolish policy bashing and greed bashing from wherever it comes..

  6. Sorry to pour cold water on this but they aint done it yet. It’s yet another Tory aspiration that sounds good and how convenient it should come just after all that bad news when the Tories need a shot in the arm to their “it’s fair” agenda. Why will it take so long to implement, will the cuts take so long to implement I wonder? And when it does doubtless VAT and inflation will have made the rise from £132 to £140 more negligible than anything else. Also though it was a guiding principle of the “progressive” approach of the Tories not to give rich people benefits are they not supposed to only be for people who need them? God knows after last week’s smash and grab on benefits there are going to be a lot more real poor people than all these millionaires who will now (by now I mean some nebulous and unspecified time in the future) get their £140 per week!

  7. Well Munguin, I did say, in answer to Dubbieside, that I wouldn't put my shirt on it.

    It doesn't in any way take away from the havoc I think some of the cuts will bring (remembering that SOME of the cuts are a damned good thing!)

    But I think that we have to welcome the move towards a decent pension.

    I agree too Munguin, that the £140 will have been swallowed in the time it takes to implement.

    Given that the very poorest get £132.60 at the moment, it will only be 3 years before even the smallest increase of £2.50 a year takes the figure to that level in any case.

    As usual with means testing, it is the "inbetweeners" who do so badly now, and who will gain so much from this move, if, as you say, it comes.

    If you currently receive the £99 pension and have a small private pension bringing you in around £50 a week, you will profit from a £40 a week pay rise. This will make all the difference to people.

    Of course, it may well herald the end of winter fuel payments!!

    Nothing is all good. And it should be remembered that to take the pension somewhere near the European average as a percentage of average income, it would mean payments of around £250 a week... not £140!

  8. Great news. A £7.40 increase for poor pensioners and those not so poor. Well, don't look a gift horse in the mouth they say, but when am I ever going to see the horse?

    As Munguin says £7.40 will mean nothing by/if this comes about. Economists keep banging on about what they want us to hear. Few have ever addressed the fact that the value of every £1 is dropping like a stone. Imports are costing up to 15% more than they were this year. The 5% increase in the pension will be zilch even if it was introduced next April. And let's not forget the hikes there will be in utility prices this winter.

  9. Aye Subrosa. I never said it was going to be the answer to everyone's prayers, indeed I did point out that to be anything like the average of the EU we would need to make a 150% increase in the pension rate.

    However, a state penion of £140 is better than a state pension of £99. And making the elderly beg for enough to subsist on is a despicable way to treat people, particularly as the UK government is responsible for the collapse in company pensions.

    I'm assuming that Vince Cable, an economist, would be able to work out that £140 in 5 years' time would mean a decrease in the actual income of the poorest...

    Then again...

  10. Maybe we should have an EU set minimum standard pension per member-state?

    Ever closer union, built upon the solid foundations of the Acquis Comunautaire!

  11. EU countries don't have 'flat rate' pension contributions Chris. In the country women have two flat rate ones (maybe not these days because I haven't checked), a married woman's 'stamp' and what was called the full 'stamp'. In think the full stamp was around 6 times more than the married woman's stamp.

    Guess which one I paid all my working life?

  12. Dean said..

    " Maybe we should have an EU set minimum standard pension per member-state?"

    I doubt if that would work. France rioted over raising the pension age to 62. Imagine what they would think of your acquis comunautaire if you told them they would have to retire at 66.
    They already retire before us on better pensions so I doubt if they would take a 50% cut and an extra 4 years work.

  13. Well UKIPer we'd probably have to europeanise our procedures to be in more like the rest of Europe - so we'd have to see our retirement age drop a little ... but then ... I reckon the people of Britain could live with that ;)

  14. You come at everything as an Anglo-centric UKIPer, the fact is we Brits don't run the concert of Europe anymore! Time to accept that? Hmm?

  15. I think they phased out the married woman's stamp some time ago SR.

  16. Dean. I don't think a European pension would work... Levels of payment are hugely different, partly becasue of culture and history, partly I guess, becasue in parts of the union prices are double what they are in other parts.

    I've always thought that people who live in London, for example, need far more to live than people who live in other places in the UK.

    They have a Lonodn weighting for civil service jobs (or used to) why not for pensions.

    But then it's also far more expensive to live in the islands in the north and west.

    I'd welcome a European aspect to the problem though, because we'd be far better off!! Our pension is the lowest (expessed as a % of average wages) of the whole union.

    I'd also love to keep it at 60... but I doubt that that's practical.

    However Sarko is just on a cost saving exercise. A French mate was saying that 2/3 of French people are unemployed by the time they reach 60.

  17. Dean said...

    " You come at everything as an Anglo-centric UKIPer, the fact is we Brits don't run the concert of Europe anymore! Time to accept that? Hmm? "

    We don't want to run anything apart from the UK from the UK. Equal partners in a free and open Europe trading and prospering as independent friends and neighbours. Experience has shown that forcing countries together in a union of different cultures and needs will never work. And will cost a lot of money before it all collapses.

  18. Update of our EU 'contributions'...

    European Parliament 2011 budget
    Total EU spending £114.5 billion

    UK contribution £13.4 billion
    UK rebate £3 billion
    UK share of total EU budget 12%

    The European Parliament last week approved a £6.5 billion rise in the EU budget -- costing Britain another £900 million in 2011 taking our contribution to £9.2 billion (after our rebate). This was at the same moment that the British Chancellor was announcing the most severe cuts since World War Two.

    About £88 million of the money will be used for extra staff that the EU has demanded after the Lisbon Treaty, while £17.1 million will be allowed for officials to send their children to fee-paying schools.

  19. Tris & UKIPer,

    Be under no illusions, we shall relentlessly push back the boundaries of narrow minded little englander syndromes that UKIPer illustrates.

    Where there isn't enough commonality - we shall europeanise till there is.

    Long live Europe.

  20. Dean..

    You shouldn't be playing on your computer so late at night. What will your carer say when he finds out ?

  21. UKIPer,

    Your little Englander phobic tendancies shall; if let loose on government policy; destroy this once proud kingdom.

    All good Europeans, patriots and pragmatists have a moral, ethical and national duty to oppose your europhobia.

  22. Dean said...

    " this once proud kingdom "

    I'm getting through to you at last. Now go to bed.

  23. Scotland is still a proud kingdom lads, even if the disunited kingdom is starting to look ragged round the edges.

    I think we should all go to bed...

    Eww er. I didn't mean that the way it sounded ;¬)