Lib Dems unveil ‘citizen’s pension’ plans
The basic state pension would rise from £82 to £109 a week under pension plans put forward by the Liberal Democrats today.
In order to help pay for this “citizen’s pension” the retirement age would also be increased to 67 – though not for another 25 years – and the public sector pension scheme would be reformed.
“Securing a fair, sustainable pensions system that tackles pensioner poverty is one of the biggest challenges of this parliament,” said Lib Dem leader Charles Kennedy this morning.
Another change to the current system would see pension payments based on residency and not national insurance contributions, with all those who have lived in Britain for over 20 years eligible for remuneration.
Mr Kennedy said that such a scheme would particularly benefit women, who traditionally lose out by taking career breaks to bring up children.
“We have one of the lowest state pensions in the developed world, and one of the most complex systems. Women, in particular, suffer real discrimination.
“I believe that there is now a broad consensus that we need a state pension that is universal – a citizen’s pension,” he said.
The party would also make sure all employees were automatically enrolled in a “Britsaver” pension plan – although they would be able to opt out if they chose.
And MPs, whom Mr Kennedy described as having pensions “among the most generous in the public sector”, would not be exempt from reform, with their pension entitlements cut back to bring them into line with other public sector workers.
“We also need to face up to tough choices – on the state pension age, and on reforming public sector pensions. And if parliament is to be taken seriously, then it must start by looking at the pensions system for MPs which is among the most generous in the public sector,” the Lib Dem leader declared.
To help pay for the plans, he added, the state second pension would be scrapped and pensions credit reduced.
The proposals are strikingly similar to those likely to be put forward by the government’s own pension commission next week, which is also rumoured to call for an extension of the retirement age to 67.
Help the Aged today welcomed the Lib Dems decision to base pensions on residency and not contributions, but branded the proposals to raise the retirement age as “misguided”.
Director of policy Paul Cann added: “Life expectancy of the least affluent workers is much lower on average, so raising the entitlement age for the state pension will mean many older workers may never receive the increased package the Lib Dems are demanding.”
Government plans to reform public sector pensions have already met with resistance from unions, who have threatened to strike over proposals to increase their retirement age to 65.
