Wait 'til 68 for the pension
Posted by Ellen
The government has finally released its Pensions Bill, almost a year to the day after the Turner Report revealed its reccomendations into the current pension system. Pension reform will be one of the last things that Tony Blair pushes through Parliament as the PM, so that may explain why it's taken so long to produce the Bill.
The good news is that Labour will return the link between state pensions and earnings. Thatcher's government abolished the earnings link in the 1980 and instead linked the pension to inflation.
More good news is that the government's proposals include changing the number of years it takes to build a full basic state pension - from 44 years for men and 39 to women to 30 years for everyone.
The not-so-good news is that we'll have to work until we're 68 to be eligible for the state pension. That won't happen straight away, but will be phased in until 2050.
What's been lost in this debate is the very pressing need for each and every person in the UK to realise they cannot rely on the government for an income when they retire. The basic state pension is currently £84 a week, plus tax credits. That's bordering on the poverty line. Everyone needs to take responsibility for their retirement income and treat the state pension as a bonus, rather than a basic, assumed income.
The government needs to make it it compulsory for all employees to contribute to a company pension scheme. Otherwise, in 20 years time, we'll all be paying a hell of a lot more tax to cover the pensions for the people who haven't planned ahead.
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