State pensions guarantees should be scrapped, says committee

0
292

An influential committee is calling for guaranteed increases in the state pension to be scrapped, and the winter fuel payment may even be under threat.
The all-party committee of MPs says the British economy is unfairly skewed towards well-off baby boomers, who benefited from rising property prices, and says help is now needed elsewhere.
The report comes following an inquiry into intergenerational fairness from the Commons Work and Pensions committee, chaired by welfare reformer Frank Field.
It found that the “triple lock” guarantee on the state pension should now be completely scrapped because it is no longer a fair or sustainable system.
Under the current triple lock rules, pensions have increased every year for the past six years by whichever is the higher figure; either the rate of inflation, average earnings, or by a minimum of 2.5 per cent.
While this has led to many struggling pensions being taken out of poverty, the committee said that the over-65 age group is taking an “ever greater share of national income”.
After housing costs are taken into account, average pensioner household incomes are now more than those of working-age people, according to the committee.
According to the report: “The millennial generation, born between 1981 and 2000, faces being the first in modern times to be financially worse off than its predecessors.”
The report also says there should be an urgent review of the winter fuel payment, which is currently worth at least £100 and up to £300 for pensioner households.
The winter fuel payment, however, costs the public purse £2 billion every year and the committee has said it should “not be off limits” when the Treasury is looking at ways to make savings to its budget.
However, the proposals immediately came under fire from ministers who rejected any suggestion that the triple lock system would be shelved.
A statement from the Department for Work and Pensions said: “We want to ensure economic security for people at every stage of their life, including retirement. We are committed to the triple lock, which is protecting the incomes of millions of pensioners.”
However, the report was commissioned because of growing worries about intergenerational fairness.
Research shows that pensioners are less likely to be poor or in poverty than those who are in younger age groups. They also have higher average incomes than those who are of working age.

LEAVE A REPLY