Tag Archives: pensions

The Budget 2014 – a first take

George OsborneMervyn Kohler, Age UK’s External Affairs Adviser, looks at what the Budget means for savers, the social care system and our hopelessly energy-inefficient housing stock.

In its tone and delivery, the Budget speech sounded good news for pensioners, and there is much to applaud in the Government’s proposals.  But before getting carried away with enthusiasm it’s important to take a cool look at what we mean by ‘pensioners’.

Retired people with savings who have seen desperately poor returns on their investments will welcome the National Savings Pensioner Bond from next January, the simplification of ISAs and their raised savings limits.

Older people coming up to retirement can appreciate the proposed flexibilities around their pension savings, and the increases in the lump sums they are allowed to draw. But they must be careful to strike a balance between the resources they use to spend now, rather than fund their (hopefully) long lives at an appropriate level. Unfortunately these savings can only be used once! Continue reading

Missing out under new pensions rules

Pound coinsMargaret (not her real name) has been married for over 30 years. She worked part-time for many years but this work was low paid, and only during teaching terms, so she never built up her record of NI contributions.

During periods of unemployment Margaret did not claim benefits (and therefore credits which would have counted towards her NI record) because her husband was working. Margaret gave up work to look after her husband when he became chronically ill to help him remain working for as long as possible.

They felt they could manage without claiming carer’s benefits (which again would have protected her NI record), but when he did eventually have to give up work as his condition worsened they made sure that he claimed incapacity benefit, purely so that his NI contributions—and therefore, they thought, Margaret’s pension—would be protected.

Margaret’s husband will reach pension age under the present system, with a full contribution record, which they were always promised would also cover Margaret. However at 59 Margaret finds that the pension she had relied upon will no longer exist.

Continue reading

Why we need the triple lock

440x210_pound-coins In a surprise announcement at the start of 2014 David Cameron, the Prime Minister, said that maintaining the ‘triple lock’ for the basic state pension will be a key part of the Conservative’s next election manifesto. This would mean that, at least until 2020, the basic state pension would be increased annually by the rise in prices, earnings or 2.5 per cent – whichever is higher. In response the Labour leader Ed Miliband has also said he is committed to the triple lock.

Reaction has been variable. Some newspapers immediately suggested this would affect other benefits such as the winter fuel payment – the Daily Mail’s headline was ‘Turmoil over OAP benefits’. The Independent welcomed the announcement but said it does not go far enough pointing out that the basic pension is still only £110 a week.

Alternatively, others have focussed on what this means for younger people with the Intergenerational Foundation stating the move is unaffordable and ‘betrays’ the younger generation. Continue reading

Age UK establishes commission on financial services

We are “woefully underprepared” for our ageing society. That was the conclusion of the House of Lords Select Committee chaired by Lord Filkin earlier in the year.

Central to that is the fact that people just aren’t saving enough for retirement and their later life.   New polling Age UK commissioned found that just under a quarter of people aged 50-64  -  those rapidly approaching state pension age  -  think there’s no point  saving.  Worryingly, that’s not because the majority have

Tom Wright, Chief Executive of Age UK and Co-Chair of the Financial Services Commission

Tom Wright, Chief Executive of Age UK and Co-Chair of the Financial Services Commission

already made provision for their future.  More than a quarter said they were worried about having enough to live on. Only 15 per cent thought they had saved enough already.

We also frequently hear from older people about the problems they face with money matters, and the lack of solutions that really work for older people. While auto-enrolment is a massive step forward, it will not have time to reap its full benefits for people close to retirement.

That’s why we’re launching the Financial Services Commission – which will be co-chaired by Tom Wright CEO of Age UK and Dr Alexander Scott of the Chartered Insurance Institute. Launching on December 5th, it will be take the form of a series of three summits in which we will work with key industry leaders and consumer experts to examine how to improve the “financial resilience” of older people – their ability to weather the challenges that might lie ahead. It will culminate in June next year with the publication of a roadmap of actions that regulators, government and industry need to take to help keep future and current pensioners financially resilient. Continue reading