Memorandum submitted by the Barnet Senior
Citizens' Forum (PC 21)
We restate our concern over the Government's
failure to re-introduce the basic pension link with average earnings
as an essential and basic part of any income arrangement for any
older person. We also argue the need to redress the loss of income
suffered over the last 18 years by millions of pensioners as a
result of the ending of that link, a great many of whom are still
We argue that the expansion of the
means testing carries a high risk of increasing exclusion. Therefore
maximum simplicity in methods and the system is essential. We
have doubts that this will happen. The Pension Credit seems to
promise more complexities.
We draw attention to the growing
disparity of incomes between the well off/very well off and those
on low incomes-an obscenity in a rich developed country.
We urge a priority be made in the
short term to help the pensioners low incomes. Whilst not opposing
the principle and concept of people's own responsibility in planning
for their older years, we draw attention to the pitfalls of selfprovision.
We would be more welcoming to this
addition to the Government's pensions policy if it was made an
interim measure in moving towards meeting our basic concerns (contained
in our first point) that argues the need for higher basic pension,
linked to earnings
1. It is a welcome development for the Government
to be addressing the incomes of the less poor. However, it is
continuously necessary for millions of pensioners and their representative
organisations to point out the fundamental flaws in the present
system. Namely the depreciation of the value of the basic state
pension since the link with average earnings was ended. This provocation
should not go without mention. Welcome as the improvements were
during the past year, with the above inflation increase of the
MIG, the assistance towards heating bills, free TV for the over
75's, etc these have gone only a small way towards rectifying
a very real and serious injustice. Unless the Government changes
its approach to the link with earnings, it will remain an ongoing
sore and an issue provoking continuous protest. There will also
remain the ongoing insistence on a more substantial redress of
the loss of income since the link was ended.
2. The Government has decided to restrict
the 2002-03 basic pension increase to 2.5 per cent, whilst wage
inflation is going up by 4.5 per cent. This surely is unacceptable,
is basically unfair and undermines any gains in other ways arising
from Government policies. In our opinion it gives dramatic emphasis
to the points made in section (1).
3. Second pensions, private pensions, occupational
pensions, individuals savings, etc will be add-ons for each person
to strive for in order to establish decent standards in retirement
without going into poverty, or just the MIG level. It cannot be
right that this country can countenance the disparity between
average earnings (over £400 per week) and the maximum level
set for pension credit is £134.50. Even worse is the vast
disparity of the "top" people's incomes against the
growing number at the bottom. This surely has to be recognised
as an obscenity needing to be urgently rectified. Putting basic
issues right at the top of the agenda will be a major step towards
a "fairness for all" system. Pension Credit does address
the issue of reward for people's life-time saving and builds into
the system a recognition of that element, but it does not go nearly
far enough in dealing with the need for more equity.
4. Furthermore, it brings new complexities
into the pensions minefield for many people who will fail to successfully
wrestle with them. Means testing is the feature at the core of
the proposals and represents an extension of this method of benefit
provision. The undermining of the pride and dignity that is forced
upon those suffering poverty will encompass greater number numbers
of older people. Is this the direction we should be going in?
5. Complex systems may offer little challenges
to some people, particularly those enabled to cope by virtue of
their work-life training and of course the civil servants who
will administer the scheme. For a great many pensioners, the complexities
and the means testing approach, will present them with a big difficulty,
thus making easy access to their rights a problem. This is probably
a major aspect of the "failures to claim benefits" situation.
Maximum simplicity should be the imperative for any new developments
in incomes for our later years. We would urge that everything
that can be done, is done, to streamline the pensions services
delivery by the Government departments and others concerned.
6. If this is the road we are being taken
down, then there is the value of seizing the opportunity to look
at a whole range of issues and present failings. An important
"tidying up" process, as well as important changes can
be achieved. We hope that Government experts will engage fully
with our (older people) representatives and the voluntary sector
concerned in this process.
7. We have addressed the issue of today's
pensioners, ie those who have seriously lost out as a result of
the devaluing of their pensions with the ending of the "link".
Resolving this problem should be prioritised and regarded as short
term. Whether the longer term will see answers to the pitfalls
of private provision, reduction of occupational pension schemes,
misuse of pension funds for corporate gain for shareholders, is
a legacy that may still be passed on, despite the many fine words
of politicians and the social aspirations of reformist advocates.
Whether all these complex features can be overcome with developments
of, and reliance on, new technology and advanced systems, is a
matter for scepticism. It is an expanding systeman industry
providing wages, jobs and profits. Complexity can only add to
8. Finally, we re-iterate, a good basic
pension remains the best and simplest support structure of incomes
in our older years. The Pension Credit could be helpful and we
would be more welcoming to it if it was used as an interim measure.
10 January 2002