If you’d been at the ICAS “how to avert the pension crisis” debate on Tuesday, you’ll remember that part of the conversation when we discussed the Institute of Fiscal studies’ contention that we were having difficulty spending our retirement savings. I mentioned in my blog earlier in the week – that this did not seem a crisis to me.
Since then Miriam Somerset-Webb has picked up on the IFS’ research in a blog at the FT. It’s a very good blog but you need to get past the paywall to read it. Miriam picks up on Clare Reilly (Pension Bee’s) comments, that it would be a lot easier to spend your pot, if you had proper technology that responded to your wish to have your money back when and where you wanted it. Clare’s is a good point but it is based on there being wealth to drawdown.
For a very substantial number of people in Britain today, there is no such wealth.
Damian Stancombe, pension guru at Punter Southall, called me on this and reminded me of work carried out by the Joseph Rowntree Foundation (published Nov 2017).
For the avoidance of doubt, the report offers data that shows how the public policy decisions of recent years mean more money in the pockets of some families, while others are hit hard
It also published this excellent set of slides,
Joseph Rowntree Foundation’s work showed that for a significant proportion of the population, retirement was a time when every penny counted. For those dependent on benefits in retirement, the world has got a bleaker place in the last ten years. For it is our poorest who have suffered the most from the austerity imposed since the financial crash.
I mentioned in Edinburgh (ICAS) that if we had a crisis, it was a crisis not about pensions but about the lack of them; more particularly, we now have a crisis in benefits.
Unfortunately this was deemed “off topic” and we spent much of the debate talking about how to engage the “haves”, rather than what to do with the “have nots”.
To redress matters, I’m thinking about the “have nots” and hope that someone in the DWP will pick up on the matters raised by that presentation
The Joseph Rowntree Foundation made three recommendations in its report
- As the cost of achieving a minimum standard of living increases with inflation, the Government must ensure that Universal Credit and other support for families is uprated at least in line with prices, ending the benefits freeze.
- The Government must allow families receiving in-work benefits to keep more of what they earn, so that increases in the National Living Wage are not clawed back through reductions in Universal Credit and other support.
- As pensioner costs also increase, pensioner benefits should continue to be uprated at least in line with prices, and should continue to keep pace with increases in earnings over the long term.
While I am not proud that our poorest citizens continue to fall behind due to the freezing of benefits, I am proud that we are upgrading the state pension by the triple lock.
But it’s worth pointing out that it costs a lot less to triple lock Universal Credit, paid to the few, rather than the single state pension -paid to everyone.
As Damian did, so the NAO have pricked my conscience on this matter this morning.
Though I didn’t then have a link to the NAO’s report, the edited highlights given us by the BBC’s Hannah Richardson, told me what I needed to know. That Universal Credit, through its flawed roll-out and fundamental inconsistencies, is leaving large numbers of people in genuine crisis.
I now have the link to the NAO press release, which links to the full report – you can find both here.
There are numerous case studies in the report . They cannot be swept under the carpet as “off -topic”. This is from the BBC article..
And yet the Department for Work and Pensions does not accept that UC has caused hardship among claimants, the (NAO) report says.
- I don’t even have 4p to my name
- Theresa May urged to halt Universal Credit
- Charity calls for Universal Credit action
The report points to a recent internal departmental report showing 40% of claimants are experiencing financial difficulties.
I hope that somebody in the DWP is reading that. The criticism that the fate of our poorest is being swept under the carpet is coming not just from the Joseph Rowntree Foundation but from the National Audit Office.
Whatever happened to social justice?
I’m supposed to be a Tory, I carry their card. I was speaking at a conference of the Institute of Chartered Accountants of Scotland about a pension crisis. I wear a suit, I have a degree from the right kind of University, I am white, male and by any standards, part of the establishment.
And yet, when I introduced the concept of pensioner poverty into a debate about pensions in crisis as one of the panellists, I was told to shut up.
What chance for anyone who has not got all my privileges – to get heard? Small wonder that the Grenfell march is a silent protest.
We should not be living in a society which shuts the door on such debate. We should allow a debate on pensions crisis to include the impact of public policy on all citizens, not just the affluent.
It is time that more people like JRF, the NAO, Unite and Damian Stancombe, got listened to.