Pension - Conservative Impact

Pension Payment Comparisons

NOTE: Checking the OECD figures I have come to conclusion that they are unreliable. Also many of the figures banded around for European Countries are inaccurate. I have struckthrough those figures for the time being while I carry out further investigation. It does not change the appalling pensions in the UK, only shows that Continental pensions are not always what they are shown to be in reports. I will update over the next week - 23 August 2019

As a percentage of income

Figure 1 shows how the UK state pension entitlement compares with other countries. The UK has the lowest pension as percentage of salary of all OECD nations. Click on fig.1 graph to see a fuller breakdown of percentage versus salary.

The UK has a different model than most other OECD countries with private pensions playing a much larger role. 69% of UK workers have a private pension. However this leaves 31% that will rely on a state pension. See The National Insurance Scandal to understand how private pensions have been severely eroded through Conservative policy and how NI payments could have better served the UK public.

The Conservative response to a so called dwindling national insurance fund has been to increase retirement age and reduce pensions. The government is considering increasing national insurance, ending triple lock and further increase retirement age to help cover the gap. None of these measures will meet the funding gap and it foreseen that by 2030 the fund could be fully exhausted. What the government fail to mention is that the NI fund is in surplus and they are using it to pay down national debt{add reference}. In the section The National Insurance Scandal it is described how this present situation could have easily been avoided and how even now the government could take steps to remedy the situation without increasing retirement age and could also increase the state pension.

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Comparison with EU countries

Figure 2 shows the amount paid in state pension by the main European economies. Click on fig.2 to see the source. In the case of Sweden the rates look quite low considering that Sweden is regarded as a nation with good social support systems. However if should be born in mind that Sweden has a much better company contribution system where the companies contribute two thirds of salary to pension schemes. This is organised by sector to protect pension growth should an individual change job. A later section covers why private pension schemes have seen such poor outcomes in the UK.

Although Spain and Italy are seen to be struggling economies it is worth noting that their state pension payments are much higher than those in the UK.

In Figure 3 we can see the average retirement years that an individual enjoys. These figures are calculated on retirement age and life expectancy in each of the countries. It is worth noting that the UK has recently seen life expectancy growth stop while in other European countries it has continued to grow. France has such a high number of years due to the retirement age being 60 years.

For Sweden and Italy the retirement age is slightly lower than the UK, so the graph uses an cautious estimate of how many retirement years the population will enjoy.

The graph in Figure 4 shows the total state pension a year multiplied by the exepected years of retirement. As can be seen a retiree on Germany or Spain can expect to receive 4 times the amount paid to a UK pensioner. Even in the best case scenario a UK pensioner will receive a third less than other comparable European countries.

If you take into consideration the maximum state pension, the average life expectancy and the average cost of rent and food. It found that people who don't make any provision for themselves in the UK could face a stunning retirement income deficit of £252,740. This is by far the worst situation of all the European countries studied. This figure is also equivalent to 2 times the present pension amount over the lifetime of a retiree. Taking in to account the pension deficit, it can easily be deduced that a UK pensioner should be receiving 3.5 times their present pension to even sustain a reasonable standard of living.

In France, there's still a shortfall, but its just £55,590 which can be saved up for during the working years. Also with France having an earlier retirement age and so better health, it may well be that pensioners supplement their income with part time work.

In Spain, meanwhile, they run an incredible surplus, so after feeding and housing themselves, they will have £300,880 to spend on themselves. And the best situation is in Germany, where there's a surplus of £308,920.

All these things considered it is difficult to imagine how the UK can claim to be one of the richer economies. Pensioners that helped build the national wealth appear not to share in it. In later sections it describes how government policy is exacerbating this problem.

Pensioner poverty

Pensioner poverty has increased dramatically under the Tory government, while it was slashed under the 1997-2010 Labour government. See the page Poverty (Pensioner) for more details on pensioner poverty.

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The National Insurance Scandal

The NI pot

About 15 million people have no pension savings and face a bleak future in retirement, according to a major survey of Britain’s personal finances published this week by the Financial Conduct Authority.

"It is a question of the structure of the financial system that assures that the real resources are created for retirement"

https://davidhencke.com/2018/07/19/revealed-the-271-billion-rape-of-the-national-insurance-fund-that-deprived-50s-women-of-their-state-pension/?fbclid=IwAR1f5LDLwsnlawXm-U5KjamOn2ZJae-I00Ola2LHTjFMHAK8HTOpnxrEsNA

WASPI

Please note: Inclusion of WASPI information on this wiki does not infer that they have any affiliations with the Labour party or necessarily support the overall beliefs and aims of this wiki. WASPI women come from all walks of life and varied political beliefs. It is included to provide helpful information only.

Women Against State Pension Inequality (WASPI)

WASPI are a campaign group that fights the injustice done to all women born in the 1950s affected by the changes to the State Pension Law (1995/2011 Acts).​​

The 1995 Conservative Government’s Pension Act included plans to increase women’s SPA (State Pension Age) to *65, the same as men’s. WASPI agrees with equalisation, but does not agree with the unfair way the changes were implemented – with little or no personal notice (1995/2011 Pension Acts); faster than promised (2011 Pension Act), and no time to make alternative plans. Retirement plans have been shattered with devastating consequences.​ The WASPI campaign was started by five ordinary women in 2015 who decided to fight this injustice.
​ *The 2011 Pension Act included plans to increase the SPA to 66.

Objective

The aim of the Waspi campaign is: to achieve fair transitional state pension arrangements for all women born in the 1950s affected by the changes to the state pension law (1995/2011 acts). This translates into a 'bridging' pension to provide an income until State Pension Age - not means-tested - and with recompense for losses for those women who have already reached their SPA. There are no specific age groups within the period mentioned above that are favoured above others.​

Note: The Waspi Campaign do not ask for the state pension age to revert back to age 60​. There are groups that do so, details of which can be found on the Pensions page

More to follow

To follow up

https://pensionsandsavings.com/state-pension-age-rising-to-70-even-though-uk-state-pension-is-lowest-in-the-world/

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