
The pensions crisis continues to swell out of control
We know what is required without waiting for the conclusions of the commission revived by Liz Kendall, the Work and Pensions Secretary. The state pension needs to be secure and adequate, but also affordable, while the number of workers saving into a private pension needs to grow.
Neither ambition is easy to achieve. The state pension age is set to rise again next year to 67 and then to 68; but with so many more people living for longer even this is hard to sustain. Another increase is on the cards. When the state pension was introduced in 1908, the qualification age was 70. The cost of maintaining the triple lock is hard to sustain against other competing spending demands.
Private pensions are equally problematic. Around 20 per cent of private sector employees, and 80 per cent of self-employed workers, are not saving into a scheme. Moreover, of those saving in a 'defined contribution' arrangement, almost 40 per cent are set to have an inadequate retirement income. Increasing contributions is difficult since many working-age individuals are reluctant to forgo any more income. The middle classes are also saving less as high taxes and other uncertainties undermine faith in pensions. Reforms, including automatic enrolment, have succeeded up to a point but savings are still inadequate for a comfortable retirement.
Once this country had a regime that was the envy of the world. Generous final salary schemes flourished until they were wrecked by Gordon Brown in one of his first acts as chancellor when Labour came to power in 1997.
Furthermore, why are public sector pensions not included in this review? The liabilities are huge and the employees, including MPs and Whitehall officials, accumulate pension pots that are far greater than anything in the private sector. Greater equality is long overdue yet is absent from the review's terms of reference.
The review is also contradicted by other Government policies. Rachel Reeves has already announced that pension pots will be subject to inheritance tax from 2027, thereby encouraging people to draw down on their savings or give money away.
The autumn Budget will almost certainly include tax rises to offset the failure to reform welfare benefits. How will that encourage people to save?
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The Independent
19 minutes ago
- The Independent
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'While I've been honest with the BMA RDC that we cannot afford to go further on pay this year, I was prepared to negotiate on areas related to your conditions at work and career progression, including measures that would put money back in the pockets of resident doctors… 'Based on discussions with the BMA RDC leaders between July 8 and 19, I set out three substantive areas where I believed we could work together to make real improvements.' These included tackling the 'arduous' training pathway, and 'I made it clear that I was prepared to agree actions to reduce the costs you face as a result of training', Mr Streeting said. He said he had also been looking at the cost of equipment, food and drink, and 'was prepared to explore how many further training posts could be created – additional to the 1,000 already announced – as early as possible'. Mr Streeting said he had asked the BMA for strikes to be postponed for a 'few weeks so we could work together on a detailed package that could form an offer to you to end this dispute'. He wrote to the RDC on Monday evening setting out a way to avert strike action, which had been discussed with the RDC in draft form, he added. 'I had responded to their requests for where additional information was required,' he said. 'I no longer believe that they have engaged with me in good faith.' Mr Streeting continued: 'I deeply regret the position we now find ourselves in. The public, and I am sure many of you, do not understand the rush to strike action. 'I would like to thank all those that will be turning up to work and supporting their colleagues in providing care for patients despite the challenging circumstances. I urge you to join them. We can achieve more for both doctors and patients by working together.' Later, Mr Streeting said there is 'no getting around the fact that these strikes will hit the progress we are making in turning the NHS around'. He added: 'But I am determined to keep disruption to patients at a minimum and continue with the recovery we have begun delivering in the last 12 months after a decade-and-a-half of neglect. We will not be knocked off course.' Daniel Elkeles, chief executive of NHS Providers, told PA health staff will be working 'flat out' to see as many patients as they can during the strike, after NHS England made clear it wants as much pre-planned care as possible to continue. He said: 'Striking doctors should think carefully if they are really doing the right thing for patients, for the NHS and for themselves. 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The BMA said Mr Streeting and his officials have refused to continue talks across the strike days and the minister's letter to them 'amounted to nothing more than vague promises on non-pay issues'. RDC co-chairs Dr Melissa Ryan and Dr Ross Nieuwoudt said in a statement: 'Pay erosion has now got to the point where a doctor's assistant can be paid up to 30% more than a resident doctor. That's going to strike most of the public that use the NHS as deeply unfair. 'Resident doctors are not worth less than they were 17 years ago, but unfortunately they've seen their pay erode by more than 21% in the last two decades. We're not working 21% less hard so why should our pay suffer? 'We're asking for an extra £4 per hour to restore our pay. It's a small price to pay for those who may hold your life in their hands.' The statement said Mr Streeting had every opportunity to prevent the strike, and added: 'We want these strikes to be the last we ever have to participate in. 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