Tagged with Pension reform

Simplicity of state pensions is not the issue: it’s how much and when that matters

IDS’ side-kick, Steve Webb, unveiled the £144 a week single-rate state pension yesterday, triumphantly noting its simplicity. So which would you have – a simple pension or a decent pension? And £144 a week, less than £7,500 a year, is not a decent pension. It’s a shameful fob-off after a lifetime of working which is now being extended to the age of 66 from 2020 and to 67 from 2028.

Britain already has one of the poorest State pensions in Europe, and the government’s latest proposal will actually lower the proportion of GDP spent on pension-age benefits from 8.5% in 2060 under the current system to just 8.1%. Continue reading →

Pension reforms – inefficient, unfair, a disincentive to save, deflationary and wrong

As economists we are opposed to the public sector pension reforms proposed by this government and Lord Hutton.

Public sector pensions are far more efficient than private pensions. The net cost of paying public sector pensions in 2009/10 was a little under £4 billion. The cost of providing tax relief to the one per cent of those earning more than £150,000 is more than twice as much. The total cost of providing tax relief to all higher rate taxpayers, on their private pensions, is more than five times as much. Continue reading →

John Hutton: Tory fig-leaf

Today, a report commissioned by one of the most radical right-wing governments in modern British history is being published. It recommends slashing the pensions of six million public sector workers while forcing them to contribute more and retire later. It sums up the Government’s whole approach to the economic crisis that erupted three years ago. The pillars of any civilised society – our nurses, teachers and other front-line staff – will be forced to suffer, while the banks who caused the crisis will have their balance sheets topped up by generous cuts to Corporation Tax.

And who is the face of this assault? The author of the report, of course: John Hutton, New Labour’s former Work and Pensions secretary. Continue reading →