Latest news with #Liz Kendall
The Independent
6 hours ago
- Business
- The Independent
Minimum level of retirement income needed to prevent surge in pensioner poverty, MPs warn
Ministers should ensure a retired people have a minimum level of income to prevent a surge in pensioner poverty, MPs have warned. It comes after the work and pensions secretary Liz Kendall said Britain faced a 'tsunami of pensioner poverty' without major reform to the system as she opened the door to an increase in the state pension age. Age UK has found that two million pensioners are already in poverty, with the number expected to rise. Now MPs on the Commons Work and Pensions Committee say a new national strategy to tackle the problem among older people is needed. They have urged the government to set and deliver a minimum level of retirement income, enough for a "dignified, socially acceptable standard of living" in later life. The report also warns that, as people age, the health and social care systems risk becoming unsustainable if ministers fail to tackle the effect poverty has on ill-health. Among the worrying long-term trends that "threaten to undermine pension adequacy", are people renting into later life, the report adds. It also calls for ministers to ensure those entitled to pensions credits of up to £4,000 a year receive them. Current take up is under 70 per cent, with an estimated 700,000 households missing out. Receiving pension credit can also help older people access other benefits such as housing benefit, council tax support, the warm homes discount, a free TV licence, and help with their dental treatment. The report warns: "After a decline in pensioner poverty in the 2000s, the number of pensioners in relative low income started to rise again from 2010. This has been exacerbated by increases in the cost of living since 2021." It continued: "In practice, this means cutting back on essentials, like food, energy use and seeing friends, in an attempt to manage costs. Health experts explained the implications for health. Financial hardship can accelerate the ageing process, making it more likely that an older person will enter hospital or need care." Debbie Abrahams, the Labour MP who chairs the committee, said: "To boost incomes, the government needs to come up with a strategy to increase pension credit take-up. It's a scandal that so many have missed out for so many years, often through an aversion to claiming benefits altogether, or lack of support.' She added: "Ultimately, the government should decide what it thinks is enough for a dignified retirement, and then work to ensure that all pensioners are on at least that level. "Faced with a combination of high energy costs, ill-health and ever higher rates of pensioners in more costly privately rented accommodation, tackling pensioner poverty is not simply a DWP (Department for Work and Pensions) issue. So, we're calling for a nationwide, cross-government strategy for an ageing society that should be rooted in equity and wellbeing." On Tuesday, chancellor Rachel Reeves said that a review into raising the state pension age is needed to ensure the system was "sustainable and affordable". The state pension age is currently 66, but will rise to 67 by 2028. A government spokesperson said: "Supporting pensioners is a top priority, and thanks to our commitment to the triple lock, millions will see their yearly state pension rise by up to £1,900 by the end of this parliament. "We have also run the biggest-ever campaign to boost pension credit take-up, with nearly 60,000 extra pensioner households being awarded the benefit, worth on average around £4,300 a year. "But we know there is a real risk that tomorrow's pensioners will be poorer than today's, which is why we are reviving the Pension Commission, to tackle the barriers that stop too many people from saving." Caroline Abrahams, charity director at Age UK, said: "We warmly welcome this thoughtful and wide-ranging select committee report, which comes closer to providing a thorough and progressive strategic overview of the issues facing older people on low incomes and proposing workable solutions than anything successive governments have produced in recent years.'
Yahoo
2 days ago
- Business
- Yahoo
Should the state pension age be raised above 66? Have your say
Yahoo UK's poll of the week lets you vote and indicate your strength of feeling on one of the week's hot topics. After the poll closes, we'll publish and analyse the results each Friday, giving readers the chance to see how polarising a topic has become and if their view chimes with other Yahoo UK readers. A review into raising the state pension age is needed to ensure the system is "sustainable and affordable for generations to come", Rachel Reeves has said. Speaking to reporters on Tuesday, the chancellor said that as life expectancy increases, it is "right" to look at the age at which people can begin receiving their state pension. The state pension age is currently 66, rising to 67 by 2028, and to 68 between 2044 and 2046, although some have suggested this date could be brought forward. By the 2070s, the number of pensioners in the UK is expected to have increased by more than 50%, while the working age population will have only grown by around 10%, work and pensions secretary Liz Kendall said as she announced a separate review into pensions adequacy. This clearly puts pressure on the government, with the Treasury spending around £138bn on the state pension last year, equivalent to 5% of GDP. The Office for Budget Responsibility (OBR) expects this to rise to 7.7% by the early 2070s. Head of public policy at AJ Bell, Rachel Vahey, said an ageing population "places an increasing burden on taxpayers", and that while future governments may hope for an "improved economy and growing tax receipts", this "can't be guaranteed". The Institute for Fiscal Studies claimed increasing the state pension age is a "coherent response" to people living longer, but warned it "affects poorer people more, as well as those who find it more difficult to remain in paid work at older ages". It said any savings from delaying payouts should be "recycled into making universal credit more generous for those in the run-up to that age". Disabilities and caring responsibilities in older age, which could leave people unable to work, is also a consideration, with the International Longevity Centre UK noting that these factors "vary significantly by region and social class". But what do you think, is raising the state pension age inevitable? Or do you think the current level of 66 strikes a fair balance? Let us know in the polls below. The "elephant in the room", as Vahey describes it, is that the state pension age is "just one lever government has to help manage the cost of the state pension". The other is reforming the triple lock, a cast-iron guarantee that state pensions will rise every year by 2.5%, CPI inflation, or the rise in average earnings, whichever is highest. Yesterday Kendall said that the triple lock is "out of scope" of the newly resurrected Pensions Commission, which will be leading a review into the adequacy of the pensions system. Labour has already committed to keeping the triple lock, which first came into force in 2011, for the entirety of this Parliament. This puts considerable pressure on the Treasury's finances, however, with the OBR expecting the annual cost of this policy to reach £15.5bn by 2030. It said spending on the policy has risen by as much as three times the figure projected in 2012 and questioned whether taxpayers can realistically continue paying for it. 'The UK cannot afford the array of promises that it has made to the public,' the fiscal watchdog's chairman Richard Hughes said. It would be wrong to scrap the pensions triple lock to cover the cost of spiralling on fixed incomes shouldn't pay the price for a broken system. — Sir Alec Shelbrooke MP (@AlecShelbrooke) July 21, 2025 'Precisely what the government does in response to these pressures and the choices that ultimately every country is going to have to make about how they afford their welfare states and their wider public services commitments are issues for politicians.' However, supporters of the triple lock said it helps improve the adequacy of retirement incomes for current and future pensioners, particularly those on lower incomes. A Commons research briefing added that the UK state pension is "low in an international context", with separate Parliamentary figures showing an overall 55.4% replacement rate of pre-retirement earnings from mandatory pensions, compared to an average of 61.4% among similar economies. The government may have tied its hands for now on this issue, but Vahey said that if the newly announced review calls for the state pension age timetable to be accelerated, it "could provide some cover for future governments to look at reforming the triple lock" to avert more dramatic back on Friday to read the results and analysis via the link below. Read more of Yahoo UK's Poll of the Week articles
Bloomberg
2 days ago
- Business
- Bloomberg
Rivals Labour and Reform UK Open Door to Raising Retirement Age
The ruling Labour party and upstart rival Reform UK separately opened the door to a potential increase in the retirement age, a move that would help cut the government's costs but almost certainly draw a backlash from the public. Launching a new pension commission, Work and Pensions secretary Liz Kendall on Monday announced the start of the next statutory review into the age at which Britons can collect government pension benefits, which is now set at 66. While the government is required to review the state pension every six years, the last one was in 2023, making this announcement three years early.
The Independent
2 days ago
- Business
- The Independent
Why millions could work for longer under new state pension reform
Work and pensions secretary Liz Kendall has announced a review of the state pension age, potentially leading to an increase, as she relaunched the Pensions Commission. Ms Kendall warned of a growing threat of pensioner poverty without major reform, noting that future retirees are projected to receive less than current pensioners. She highlighted that the state pension 's triple lock guarantee costs £31 billion annually and projected a significant increase in the pensioner population by the 2070s. Many individuals are not saving adequately for retirement, with nearly half of the working-age population and only one in five self-employed people not contributing to a pension. The newly relaunched Pensions Commission will provide recommendations by 2027 on how to boost retirement income, though it will not address the triple lock or the state pension age review.
Bloomberg
3 days ago
- Business
- Bloomberg
Labour, Reform UK Open Door to Increasing the Retirement Age
The ruling Labour party and upstart rival Reform UK both opened the door to a potential increase in the retirement age, a move that would help cut the government's costs but almost certainly draw a backlash from the public. Launching a new pension commission, Work and Pensions secretary Liz Kendall on Monday announced the start of the next statutory review into the age at which Britons can collect government pension benefits, which is now set at 66. While the government is required to review the state pension every six years, the last one was in 2023, making this announcement three years early.
