A New Future for Social Security – Age Scotland submission

Age Scotland has put forward an wide-ranging submission to the Scottish Government’s consultation on the future for social security in Scotland.

The charity endorses the basic principle that social security should be seen as an investment in the people of Scotland and in strengthening our social fabric.  We propose models which should exhibit trust in people and respect for their dignity.

We advocate an end to rules which are probably discriminatory based on age – such as the lack of a mobility component for attendance allowance, unlike other disability benefits – and we support the principle that universal winter fuel payments are the most effective means of reaching those most in need of support.

The submission is extensive, comprising some 56 pages, although the consultation paper was over 140 pages long and posed over 170 questions.  It is the most detailed policy submission which the charity or its predecessors have ever compiled.

The submission gives the charity’s perspective on a wide range of specific benefits affecting older people which are being devolved (including disability and carer’s benefits, funeral payments, and winter fuel payments).

It also deals with a series of administrative matters on how eligibility should be worked out, how benefits should be paid, and the overarching principles and intended outcomes which should be a focus for the new system.

Another important aspect is ensuring that the new devolved system works well with the other benefits which will remain reserved to the UK Parliament and Government, and administered by the DWP, JobCentres and the Pension Service.  Clearly it is important for there to be no disruption to payments on which vulnerable people depend, either as the responsibility is transferred or as changes the Scottish Government intends to make are implemented.

The response was informed by the views and experiences of older people themselves, which we gathered at eight distinct consultation events around the country, and also the expertise of our policy staff and helpline advisors, who regularly support older people with benefits concerns and queries.  We aim to use this invaluable information in our further discussions with Government Ministers and officials as the policies take shape and legislation is prepared to give effect to them.

Download our submission


Please feel free to share any views you have by emailing policycomms@agescotland.org.uk

Why we need the triple lock

Far from feather-bedding wealthy older people, the ‘triple lock’ on pensions increases is vital for future generations says Sally West.

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.

The real impact of the triple lock

So what impact does it actually have?  By April 2014 the Coalition’s commitment to the triple lock means the basic state pension will be £113.10 a week – around £8.50 a week higher than if it had been increased in line with earnings, and around £2 a week higher than if it has been linked to prices rises.

Other parts of retirement income are not of course increased by the triple lock – savings income is low and private pension income may not even keep pace with inflation.  So for current pensioners, while the basic pension on its own is still not enough to live on, the triple lock has provided an important boost in difficult times and helps ensure that the value of at least one part of their income is maintained. This is why Age UK has been campaigning for all parties to commit to the triple lock going forward and is very supportive of the recent announcements.

But we are also concerned about the position of future pensioners. Legislation before Parliament replaces the current complicated state pension system with a new single-tier pension for people reaching state pension age on or after 6 April 2016. All the Government’s analysis on the impact of the new pension assumes it will be increased by the triple lock – but this is not set out in the legislation.

Unless this happens younger people will find it much harder to build up an adequate retirement income. The independent Pensions Policy Institute calculates a younger person with lower earnings has a 63 per cent chance of achieving an adequate retirement income if the state pension is increased by the triple lock, but this could fall to 36 per cent with an earnings link.

So far from the triple lock being unfair to younger people, if there is a commitment for it to apply to the new state pension, as well as the current system as Age UK is calling for, it could make all the difference to today’s younger generation.

It’s especially important to those struggling with low wages who can make limited private pension savings. Without the triple lock, they could find the value of their state pension – when they eventually receive it – has been eroded and is too low to enable them to achieve a comfortable retirement.

Sally West is Strategy Adviser for Income & Poverty with Age Scotland partner Age UK.