Toggle high contrast

Putting Pensions Right - October 1st

Issue date

On International Day for Older People, 1st October, the Midlands TUC Pensioners Committee, in conjunction with the British Pensioners Trade Union Action Association, held the ‘Putting Pensions Right’ conference in Coventry to raise awareness about the problems facing pensioners and to confront the myths surrounding pensions and older people.
 
Rob Johnston, the Midlands TUC Policy and Campaigns Officer, told the conference that “we have to fight the myth of inter-generational unfairness, the idea that pensioners are rich while young people are poor and that we should take money away from older people to make life better for young people.”

“There are enormous differences between rich pensioners and poorer pensioners. For instance, the 75-84 year age group comprises six per cent of the richest decile and the six per cent of the poorest decile. The focus should be on inequality not a generational battle.

“It’s also a myth that pensioners have escaped from the government’s cuts. The ‘triple lock’ on the state pension only looks relatively generous due to the appalling squeeze on wages, whilst a quarter of all social security cuts implemented between 2010 and 2016/17 will fall on pensioner families with a large proportion of the losses due to the change from RPI the lower CPI measure of inflation.”

“The so called freedom to cash in pensions at 55 was introduced without consultation and has many dangers. A different approach would be to help people towards sensible good value solutions that give them a sustainable income in retirement, provide insurance so they don’t run out of money if they live longer than expected and, ideally, are collective schemes so that investment risk, longevity risk can be shared and costs are kept to a minimum.”

“On the positive side, auto-enrolment has been a success, with opt out rates at just  10% . This has started to reverse the long-term decline in participation in workplace pension schemes. Nevertheless, challenges still remain with five million workers, the majority of them women, currently excluded from auto-enrolment. The DWP will be reviewing auto-enrolment in 2017 and this is an opportunity for us to outline how auto-enrolment can be improved.

The conference also heard about a new TUC report into which highlighted the disparities with healthy life expectancy in the region, showing that the lowest healthy life expectancies were to be found in areas of greatest need. The figures also demonstrate that many people will now be retiring after the average healthy life expectancy age.

The Healthy Life Expectancy report can be viewed at: https://www.tuc.org.uk/economic-issues/pensions-and-retirement/report-s…

Pam Flynn of the National Assembly of Women (NAW) said that the pension gap between men & women across Europe was now 39%.  She added: “Those fortunate to work for employers with occupational pension schemes have often had to give up pay rises to keep their jobs.

“Cashing in pension pots is the biggest con of all.  Up to three-quarters of monies withdrawn will be taxable.  This is nothing more than a tax fishing exercise.

She also said “We need a review of pensions that deals with issues such as low pay, broken employment records and maternity leave.

“We need to remember that the Pensions Act is designed to be cost neutral.  However,  by 2040 only 35% of pensions will be better off, 20% will be the same while 45% will be worse off,” she concluded.

Sandra Durkin of British Pensioners Trade Union Action Association (BPTUAA) endorsed the TUC document “Young against Old –What`s really causing wealth inequality?” urging delegates to beware of government attempts at divide and rule.  She warned: “The current generation of pensions are the last that will be better off than when their parents were in retirement.

Not Young versus Old

“Young peoples’ ability to save has been considerably reduced – and even young professionals are having difficulties paying into their occupational pension schemes.

“The real reason for OAPs’ wealth is down to the massive increase in house prices.  However, not all pensions own their own home.  What is needed is to increase young peoples’ earnings via proper skills training as this will enable them to get highly paid jobs.  Current government rules prevent this as if you want to go on a Level 3 course and are aged over 24 then you have to take out an Adult Learning Loan.

“There also needs to be better pay bargaining and job guarantee schemes that work.  The tax system should be linked to wealth, not just to income.”

The “Young against Old –What`s really causing wealth inequality?” Touchstone pamphlet can be viewed at: https://www.tuc.org.uk/economic-issues/touchstone-pamphlets/young-again…

Enable Two-Factor Authentication

To access the admin area, you will need to setup two-factor authentication (TFA).

Setup now