Britain is facing a ‘tsunami' of pensioner poverty, says Kendall
At the launch of a major independent commission on the pensions system, the work and pensions secretary said growing numbers would struggle to make ends meet in old age.
'Unless we act, tomorrow's pensioners will be poorer than today's, because people who are saving aren't saving enough for their retirement, and crucially, because almost half of the working age population isn't saving anything for their retirement at all,' she said.
The commission echoes the approach taken by Tony Blair's government to pensions reform in 2002, when an inquiry chaired by Adair Turner led to the system of auto-enrolment.
The commission will be led by a member of Adair's team, Jeannie Drake, with former Barclays UK chair, Sir Ian Cheshire, and the economist Nick Pearce also on board
It will consult the Confederation of British Industry and the Trades Union Congress, with the aim of building a consensus, which Kendall said she hoped would win the support of opposition parties.
The proposals could include lowering the age at which auto-enrolment into workplace pensions starts – currently 22 – and raising contribution rates, now set at 8%.
It will also look at the idea of 'sidecar savings', which are advocated by the Resolution Foundation thinktank whose former chair, Torsten Bell, is a pensions minister. This approach would allow a set amount of pension savings to be accessed as a rainy-day fund in emergencies.
Kendall confirmed that she was also launching the regular statutory review of the state pensions age. It is set at 66 but is already expected to rise to 67 between 2026 and 2028.
Kendall made clear that the costly triple lock pensions guarantee will not be considered by the commission, which is set to report in 2027. 'The triple lock is out of scope,' she said.
The independent Office for Budget Responsibility has warned about the much higher than expected costs of the triple lock, which uprates the state pension in line with inflation or wages, or by 2.5%, whichever is higher.
Questioned after her speech at a south London community centre, Kendall acknowledged the role in pensioner poverty of high housing costs after retirement.
'My big worry is, so many young people have not even got a hope in hell of getting on the housing ladder, they're being absolutely killed by their rent, and if you are paying off your mortgage in retirement, or still renting in retirement, that is what is driving this sort of tsunami of pensioner poverty that is coming our way,' she said.
The commission will not be asked to look at housing policy but Kendall pointed to other Labour policies in this area, including boosting housebuilding.
Sign up to Business Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
Bell, who attended the event, was asked about the prospects for reform of pensions tax relief, with higher rate taxpayers receiving it at 40%.
Cutting this to the basic rate, or reducing the size of the lump sum pensioners can withdraw from their savings pot tax free, have been mooted as money-saving measures in the run-up to the autumn budget.
Bell said: 'Tax changes are not in scope for this review. But the tax system obviously is important, and we have a system of pension tax relief costing around £70bn a year that does provide strong incentives for saving and that's a good thing.'
Business groups gave the launch of the commission a cautious welcome but warned about the risks of piling more costs on employers by raising their contribution rate.
Kate Nicholls, who chairs UK Hospitality and attended the launch, said: 'We've already seen the unintended consequences increasing business costs, like employer national insurance contributions, has had on the employment market, costing jobs. It's therefore crucial the commission embarks on a partnership approach with business and consumer groups to reach the right balance.'
Kendall also alluded in her speech to Labour's U-turn on cuts to disability benefits, insisting the government would continue to advocate change.
She said: 'Reforming the welfare state is never easy, and always contested. Let's be honest, the last few weeks have made that pretty clear – while the path of reform is inevitably bumpy, it cannot be avoided.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
9 minutes ago
- The Independent
The government must ensure the promise of free childcare is delivered
Takeup of the government's offer of free childcare has been one-quarter higher than predicted, which has prompted some voices in the sector to warn of its imminent 'collapse', because it is unclear how the planned expansion of the scheme in September will be funded. Bridget Phillipson, the education secretary, in an exclusive interview with The Independent, says the unexpectedly high numbers signing up for the scheme is a 'good problem to have'. There is no doubt that there is a problem, however. The higher takeup meant that the Department for Education spent £2bn on the scheme in the last financial year, covering most of the first year of the Labour government, rather than the planned £1.6bn. That gap was covered by additional funding announced in the spending review in March, but as we report today, the Institute for Fiscal Studies estimates that the gap will continue to widen as the scheme expands. The next expansion will happen in September, when working parents with children aged nine months and older will be offered 30 hours a week of 'free' childcare. Of course, the care is not 'free' in that it has to be paid for by taxpayers generally – on the grounds that helping the parents of young children to work is a public good. As Ms Phillipson puts it: 'If people are able to work, or work a few more hours, that helps us all as a society as well and it gets economic growth going.' The funding of the scheme will continue to be under pressure, but the most important fact about the scheme so far is that it has not collapsed. The Independent was among those voices warning that it had been underfunded by the Conservative government, but to its credit the new government has increased the money available. The finances of the scheme may be stretched, and many childcare providers continue to say that they cannot recruit enough staff at the wages they can afford, but the gloomier warnings of chaos and thousands of parents left without places have not yet been borne out. It is crucial to remain vigilant as the scheme expands so that remains the case. At the insistence of Jeremy Hunt, the chancellor in the previous government, the scheme was designed to start small, with a limited offer of free hours to older children, before expanding gradually to provide full coverage. This September's expansion is the final stage of that planned rollout, which so far has gone more smoothly than we expected. If the last stage is a stretch too far and some parents cannot immediately find the places they want, that would be a blow to the government's ambitions. Ms Phillipson is right that the problem facing the scheme in its final phase is the problem of success. The higher-than-expected demand means additional pressure on the public finances in the later years of this parliament – pressure that coincides with other increased demands on Rachel Reeves, the chancellor, from slow growth, higher interest rates and a government U-turn on disability benefits spending. Providing greater access to free childcare is a good policy that will help working families. Its success and ambition should be applauded. The government must now make sure that its expansion is a success.
The Sun
9 minutes ago
- The Sun
Asylum seekers are still getting money on taxpayer-funded credit cards after being granted refugee status
ASYLUM seekers are still receiving money on taxpayer-funded credit cards even after being granted refugee status. A probe has been launched after we uncovered cases of migrants saying they were still getting the handouts - despite rules stating payments must stop once leave to remain is granted. It piles fresh pressure on the Home Office, which is already facing questions over the ASPEN card scheme after it emerged thousands of attempts were made to spend the cash in gambling venues. 1 One migrant wrote in a Facebook group: 'I was granted refugee status in January 2025. I'm still getting money on my ASPEN card… do I need to inform the Home Office or will it stop automatically?' Another user replied: 'I know someone else this happened to. But he had payments for a whole year. 'He did not touch the money as the Home Office could ask you to refund if you are not entitled to this.' Another admitted they are getting payments for dependants who have gone home. When asylum seekers arrive in the UK, they are typically housed in fully catered hotels and receive £9.95 a week on their ASPEN card, rising to £49.18 a week if they are later moved to self-catered accommodation. A Home Office spokesperson said: 'The Home Office rules state that – when an individual ceases to qualify for support – their subsistence payments will automatically end, and their card will be cancelled, after a short transitional period. 'As part of our investigation into the functioning of Aspen cards, we will look into any instances where cards have not been cancelled as intended, and take whatever action is necessary to correct any faults.' The Tories last night insisted it was 'further evidence' Labour has 'lost control of the immigration system'. Shadow Home Secretary Chris Philp said: 'We have seen luxury hotels provided for illegal immigrants, record ever numbers crossing the channel, rapes and sex offences being committed by asylum seekers, taxpayers' money being used to fund gambling by illegal immigrants and now we find they can't even switch the payment cards off when they should. 'This system has become a complete farce. No wonder it costs billions each year. It is an insult to taxpayers that illegal immigrants get better treatment than they do.' Reform UK's Richard Tice also let rip: 'We keep being told that there is no waste in government yet it's clear to see taxpayers are being taken for a ride by asylum seekers. 'The solution to this is simple. If you stop the boats, you stop the benefits and the enormous costs that are associated with illegal crossings. Only Reform will do this.' The wider investigation into ASPEN card misuse began earlier this week, after a Freedom of Information request by PoliticsHome revealed more than 6,500 gambling-related transactions had been attempted by asylum seekers in the past year. Although online gambling was blocked, migrants were able to use the cards in physical sites such as casinos, slot machine arcades and lottery retailers. In some cases, they withdrew cash in or near gambling venues. There are currently around 80,000 ASPEN card users in the UK.
Daily Mail
9 minutes ago
- Daily Mail
Woman in Union Jack dress was turned away from Wetherspoons during anti-migrants protest
A woman wearing a Union Jack dress was turned away from a Wetherspoons so as 'not to increase tensions' after an anti-migrant protest in the area. Tanya Ostolski, 54, from Sutton-in-Ashfield, Nottinghamshire, says she was knocked back from The Picture House last night, despite being a regular in the pub. Dozens of protestors had gathered in the town centre from around 4.30pm after Reform MP Lee Anderson went against police advice to make an unverified claim that a local man charged with rape was an asylum seeker. It followed similar anti-migrant demonstrations outside The Bell Hotel in Epping, near Essex, and the Britannia Hotel in Canary Wharf in central London, in recent weeks. Last night's protests in Sutton-in-Ashfield had ended at around 7pm when protestors made their way back to the where the gathering began, around 50 metres from the pub. Many of those who took to the streets were waving Union flags or were wrapped in the St George's Cross flag and had sought to get into the pub after the demonstrations were over. But clashes with bouncers outside the pub quickly ensued when they were denied access due to a 'no-flag' policy deployed by Wetherspoons in their establishments. Ms Ostolski says she was holding a St George's Cross flag when she was first refused entry by bouncers on the door, before putting it in her bag in the hope that would allow her access. But the 54-year-old said she was 'absolutely disgusted' when she was told by those on the doors that she still wasn't allowed in because of her dress. She said: 'I go in there all the time and they refused entry. They didn't let me in with my flag, the flag is the English flag, so why shouldn't I be allowed to have an English flag? 'It's our flag, it's our nation's flag. I wasn't being aggressive or anything I didn't get lairy or anything. I put the flag back in my bag, and they said I can't come in because of my dress. 'They kept refusing me. I'm probably going to get barred now. They just said Tanya, you're not coming in. I feel absolutely disgusted, why should I be refused entry for wearing a dress or a flag?' The spokesman for Wetherspoons, Eddie Gershon, said the decision was made to ensure calm in the area and 'as a matter of common sense'. He said: 'Pub managers have a duty under the licensing laws, and as a matter of common sense, to judge every situation on its particular circumstances. 'In this case, the pub manager felt that it was important not to increase tensions. Therefore, on this occasion the manager asked customers not to enter with flags or any placards.' Ms Ostolski's knockback comes just days after a schoolgirl was put into isolation for wearing a similar Union Jack dress to celebrate being British at her school's culture day. 'Straight A' student Courtney Wright, 12, wore a Spice Girls-esque dress and wrote a speech about history and traditions as part of the celebrations on July 11. But the Year 7 pupil was told the dress was 'unacceptable' before being hauled out of lessons and made to sit in reception until her father collected her. Downing Street would go on to condemn that decision, with a spokesperson for the Prime Minister saying: 'The PM has always been clear that being British is something to be celebrated. 'You can see that from everything this government has done. We are a tolerant, diverse, open country, proud of being British.'
