Pensions poverty warning
The Pensions Policy Institute has issued a new report in which it calls for state pension provision to be used to reduce pensioner poverty.
More than one in five pensioners lives in relative poverty, and there are concerns that targeted benefits and credits that might raise incomes for the poorest pensioners will suffer from low take up levels that are common with means testing.
This has caused the institute to suggest that spending on the state pension should rise, though this appears contradict world policy opinion, which is that state pension systems must be less generous so as to be able to afford increasing numbers of pensioners.
The UK has one of the most affordable state pension systems in the developed world. The proportion of the economy that is spent on the state pension is expected to fall from 5.5% of GDP to 4.4% by half way through this century, despite a massive rise in the number of pensioners over the same period.
While most countries are faced with rising state pension demands, the UK is among a handful of nations with a large private pension provision. The shift towards private pensions is now being demanded in other countries, but the Pensions Policy Institute is calling for increased state provision here.
The institute further criticised existing state provision for being too complex, and has called for it to be simplified, arguing that private provision will be best served by the sure footing of a state pension system which is all that many poor people will have to live on in retirement.
