In this lecture, Steve Webb gives us what he calls  a two course meal

The first course looks at  how it  is  that Government is getting its administation so wrong on the payment of the State Pension

Steve’s charitable answer is that we are being paid from a system designed in the late 1940s based on men going out to work and getting a pension. The old state pension didn’t consider women as a consideration.

What has followed is the maladministration of 165,000 pensioners (mostly women}, who have been short-changed by the demise of the spouse. In total £1bn is owing them of which only a proportion has been recompensed. More than 1,000 civil servants are on the job, sorting out this problem.

A second and related problem is that “carer’s credits” have often been earned and not recorded , leaving many (again mainly women) with incomplete pension records that need reviewing.

Since 1978, people get protected state pensions (national insurance credits) for caring. have had to be matched on two separate computer systems. The problem arises because one of the matching fields – the national insurance number – was only completed on one computer sporadically. Where there were no matches, there often were no credits.

There’s a further £1bn owing and a further administration bill racking up.

Steve Webb is a hero to those who have claims and less so (I imagine) at his former department.

The first course of the lecture (delivered on the same day as our Pension PlayPen session), is a dish served cold,

The second and main course.

The second part of the lecture, focussed on the affordability of the state pension.

Webb has some sympathy with those who are calling for an early end to the state pension triple lock, though it looks more than likely that a future Government will retain it till the end of the decade

The Labour Party won’t stand by and let more Tory chaos cost British pensioners.

That’s why the pensions triple lock will be in the Labour manifesto and protected for the duration of the next parliament. pic.twitter.com/fiRLu44IRN

— The Labour Party (@UKLabour) April 28, 2024

Webb sees it as inevitable that state pension ages go on rising. However he calls on Government to do more to help those shouldered with a long working life, to find it easier to get work in the years preceding the payment of the state pension.

Webb is against means testing , pointing out that saving in this country is voluntary , with an opt-out of auto-enrolment. Means testing of the state pension could encourage opting out with workers working out they can have higher standards of living at work and better pension after – by staying away from retirement saving.

Webb’s arguments for leaving the state pension alone are summed up on this slide.

He is interesting when pointing out that weakening the state pension will increase the gender pension gap. The state pension is paid equally to both sexes , auto-enrolment provides earnings related pensions and earnings are lower for women.

Webb is concerned about current levels of pre pension poverty resulting from large numbers of those arriving at pension age not having benefited from longstanding auto-enrolled savings or from defined benefit pensions. For many such, the personal pension is just a bridging payment to tide them over till the state pension cuts in, An adequate state pension is vital, there being no other

And a further argument in defence of a proper state pension is that it provides the indexation in income lacking from private pensions

But Webb’s main  reason for jacking up the state pension is that it has been in decline for 30 years and he finishes his labour with this statement

“State pensions are affordable but we need to plan ahead more than we’ve done in the past”

If you have half an hour to spare, this lecture is well worth watching, if you have an hour, you should listen to Webb’s answers to the questions, especially his answer to questions about the link between state pensions and national insurance.

We have not heard the last of the state pension this election campaign.

Labour is also yet to set out its position of the state pension age. Unions have called for the pension age rise to 67, due to start in 2026, to be scrapped. https://t.co/M7VkSxlA3q

— Josephine Cumbo (@JosephineCumbo) April 28, 2024