PENSIONS LINK TO EARNINGS ALONE WILL NOT SOLVE PROBLEMS

Speaking during the second reading debate on the Pension Bill in the House of Commons Angus MP, Mike Weir, SNP Shadow Minister for Work and Pensions, warned that unless the government tackled the concerns of today’s pensioners then the proposed reform of the system would fail.

Whilst he supported the government’s proposal to link pensions to earnings he warned that it alone would not solve the problems of low basic state pension.  Mr Weir also criticised the uncertainty of when the change will be made, since the bill only proposes it will be done sometime between 2012 and 2015.

“Although restoring the link with earnings will prevent the basic state pension from declining in value year on year, it will not make good the fall in the value of pensions that has happened over the years.

“If it is delayed to 2012 the value of the basic state pension will have fallen to only 12 per cent of average earnings - £71 in today’s terms,  Worse still if it is delayed to 2015 it will only be worth £65.  many of today’s pensioners will receive absolutely no benefit from the change.

Mr Weir argued that the way forward was to introduce a universal Citizens Pension for every pensioner.

“If we introduce such a Citizen’s Pension we will ensure that our pensioners are lifted out of poverty and given a firm foundation on which everyone can build their own additional pension provision.

“The government’s proposed Personal Accounts will fail unless linked to such a Citizen’s Pension since they will be undermined by the continuation of means testing.”