Some countries have a means-tested state pension, like the Australian ‘aged pension’. I am against that idea as it demotivates savers. Why contribute to an AE pension if your sensible attitude to money just denies you any state pension?
Other countries have an earnings-related scheme, instead of our flat pension. That idea is worth exploring.
My current favourite is a universal pension based on residence, perhaps building an entitlement for every year UK citizens work and pay income tax. But just how many people live in the UK anyway? Does anyone know?
IFS suggests in this scenario the number of years required for a full state pension could rise slightly from 35 to make the reform cost neutral. It would also reduce the risk of some people inadvertently falling through the net.
How old is too old to work?
State pension age is another thorny topic, the numbers of people in poor health or disabled rises as we age. If we boost the state pension age still further, do we want to push a whole generation of workers onto disability and means-tested benefits, denying them the dignity of retiring gracefully?
Should we bring in a full disability state pension that can be awarded earlier in cases of ill-health and work-limiting disability?
When parliament legislated for the state pension age of 67 in 2028, the ONS projected that men aged 67 in 2028 would on average live a further 21.3 years and women 23.8 years, but the latest projections give much smaller life expectancies.
Yet the state pension age may rise still further to 68. We await a decision supposedly imminently, but all is silent on that front.
There are also marginal issues like the winter fuel allowance and other age-related benefits. These should be all the rolled up into one state pension – once upon a time there was a rationale for a winter fuel allowance (even millionaire pensioners get it) but perhaps no longer?
Many believe the state pension will disappear by the time they retire but there would be rioting in the streets if future generations were expected to pay for pensioners today, if they in their turn did not have a decent state pension of their own to look forward to.
I fear ultimately there is a risk of death by a thousand stealth cuts, from axing the triple lock to trimming the retirement age. The state pension, along with the NHS, is a precious national asset and worth fighting for so it will still be there for your children to enjoy.
Lobby the policymakers. Engagement as with so much else in life from finance to litter picking is the key to the best outcomes. Don’t bury your head in the sand.
Stephanie Hawthorne is a freelance journalist
