Judging a pension system by its pensioners

Continuing my blogs from Spain…..

Yesterday, I asked the people on the bus as we made our way around whether they felt financially self-confident at the moment. Everyone on the bus is a pensioner and the responses were revealing. These are pensioners of companies or the state, – we have USS pensioners, LGPS and NHS pensioners and a number of people enjoying widows pensions (and one widower). This is a group who aren’t worried for themselves but they are worried for friends who do not have their security. People are worried about the pension increases they won’t be getting this year and they know the rules about their indexation.

Collectively, they show a side of Britain which reflects well on the pensions industry and the pension system we are apart of. Judged by these outcomes, pensioners are continuing to enjoy a robust lifestyle well into their 80s and beyond. This is how it should be.

But how many people could afford £1800 for a ten day holiday?

Meanwhile I read a headline in European Pension News.

The number of Swedish pensioners in absolute poverty is lower than in all other European Union countries, according to the Swedish Pensions Agency.

Absolute poverty is not relative to working people but based on real living standards, the only relativism is a comparison with other European countries (including the UK). I wonder how many other nations would be prepared to publish their positioning and offer it as a measure of the success of their pension system.

politicians like charts that refer to relative poverty – it makes for better reading

Measure of a pension systems success tend to focus on the amount of private saving and especially funds under management dedicated to retirement (not necessarily pensions). But most pensioners are more dependent on unfunded benefits that they haven’t saved for than from their retirement savings and this is increasingly the case , the lower you go down the scale of affluence (at which my bus passengers must be close to the top).

And here we come to the home-bias that is so prevalent in the UK. We do not see those who are poor in retirement because we have no reason to . Our families, social acquaintances and former colleagues who are pensioners are not dependent on savings or state benefits but are in secure employer funded pension schemes.

This is especially the case for those in policy , in and out of Government.

Today, Tom McPhail and I will be asking the Pension Minister to support our campaign to reduce pensioner poverty by finding ways to increase take up of pension credit (which is a door to more benefits). I suspect that a good proportion of the 850,000 households eligible but not claiming credit are in or facing absolute poverty this year.

If Britain wants to measure its pension system and whether it is improving, the measure of absolute pensioner poverty looks a good place to start. If any of my readers has access to the data on which Sweden is making its comparison, it would be good to see it.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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