Forum Brief: Pensions

Peers have demanded radical changes to the state pensions system.

In a report published on Saturday, the cross-party economic affairs committee in the House of Lords claimed the current system penalised women and ethnic minorities.

The peers called on ministers to replace the basic state pension with a non means-tested "citizenship pension" based on where someone lived rather than NI contributions.

Forum Response: Age Concern

Gordon Lishman, director general of Age Concern, told ePolitix.com: "We welcome the Lords' recognition of the problems with the basic state pension for many older people including women, and the issue of age discrimination.

"We have been working closely with the Fawcett Society for the past year to raise awareness of the pension problems faced by women. It is unacceptable that a quarter of single, female pensioners live in poverty, and for every pound of income received by men in a pensioner couple, women receive less than 32 pence.

"Central to people's ability to save for their retirement is the tackling of age discrimination in the workplace. In order to deal with age discrimination effectively, the government must not backslide on its commitment to scrap employers' mandatory retirement ages.

"It is also essential that the government creates a powerful new body as far in advance of 2006 age discrimination legislation as possible, to make sure that age discrimination in the workplace becomes a thing of the past."

Forum Response: Counsel and Care

Martin Green, chief executive of Counsel and Care, told ePolitix.com: "The proposals that have been outlined by the House of Lords economic affairs committee represent a radical new look at the way pensions are structured in the UK.

"This new way of thinking is important if we are going to meet the needs of our ageing population in the future.

"I was particularly pleased to see that peers highlighted the benefits to our society of an ageing population and debunked the myth that older people are a huge problem."

Forum Response: Help the Aged

Mervyn Kohler, head of public affairs at Help the Aged, told ePolitix.com: "Help the Aged applauds this forceful and radical report. The House of Lords all-party economic affairs committee has listened carefully to a great deal of evidence and produced ideas and recommendations which must now be heeded."The committee has addressed key points which urgently need reform in our present pension arrangements. The basic state scheme is inadequate, increasingly mired in means-testing, and in a modern world should be based on a residential test.

"Private pension planning can only thrive when the state scheme provides a firm and reliable foundation. And the committee has not shrunk from addressing the issue of working longer, which must be part of the way forward to adequate and affordable pensions."This report joins an ever lengthening list of publications calling for urgent structural reform of pensions policy. The government's chosen approach, focussed on extensive means-testing in a dwindling state scheme, and the fond hope that people will be willing to save more in an increasingly unstable private pensions sector, stands almost in isolation.

"The public, the experts, and now the House of Lords are all demanding purposeful and far-reaching reforms."

Forum Response: The Association of Retired and Persons Over 50

Don Steele, spokesman for ARP/O50, told ePolitix.com: "'As one of the organisations which contributed evidence to the House of Lords Economic AffairsCommittee, ARP/050 (The Association of Retired and Persons Over Fifty) is delighted to find so much of its own campaign agenda contained in the recommendations being put forward by the Lords.

"The 'Citizenship Pension' would have many of the characteristics which we have long advocated. It would be universal and adequate for the basic needs of the recipient, non-means tested and take into account geographical location.

"We are particularly encouraged to find the Lords standing up against the perpetuation of the 'dependency ratio' myth which the popular press has portrayed and with which the Government has been happy to collude, whereby a falling proportion of the population in work meant that we 'could not afford' to increase or even maintain, current levels of State provision.

"The Lords have taken as their starting point the growing wealth of the nation and the level of GDP traditionally allocated to pension provision.

"ARP/050 has consistently said that this is the only criterion which should be considered and effective change would only take place when a governmenthad the courage to 're-invent' State pension policy based on present economic realities rather than perpetuating the idea of pension recipients as some kind of marginalised 'welfare minority'.

"The cautious welcome given to the introduction of the European Employment Directive in 2006 is equally shared, as is the fear that its implementation will not be sufficiently robust to make a difference among employers who are inherently opposed to the employment of older people.

"The key issue of pension provision for women was first raised by ARP/050 more than five years ago when we stated that a system which retained differential provision for men and women could no longer be justified and should be replaced by a universal pension allocated on an equal basis without reference to gender.

"At a time when both occupational and private pension provision is permeated by uncertainty, these proposals, coming from the Lords, will rescue theState pension from its demeaning 'safety net' image and place it at the centre of income in retirement. Such radical and common sense thinking can only be warmly welcomed."