There has been the usual spate of New Year proposals on redistribution of Benefits for pensioners, which all entail means testing and penny pinching measures to save money, all fail to tackle the basic problems.
Winter fuel payments are the latest target, on the basis of using the money to fund elderly care; Council tax benefit is already under fire with new methods of assessment and limitation of funds, which joins travel concessions and the cuts in support to elderly charities, luncheon clubs, sheltered housing and social groups.
All avoid the main problem, which is that the State Basic Pension is now too low to support a pensioner adequately. It is well below the minimum amount a person needs to live on , put by the State at £142 per week for a single person or £222 pw for a couple, the basis of all benefit calculations, but not pensions.
The basic pension is currently £107pw for the full pension and £66 pw for a dependent spouse and those not fully qualifying; when last reported 90% of males but only some 25% of females qualified for full pension, with their earlier retirement age of 60 being steadily phased out by 2020.
The compulsory State NI contributory scheme is a farce, although it goes through the motions of keeping track of contributions, they are meaningless in practice, when you can get more in benefit without working at all. This is the overall problem with welfare benefit, where no one has looked at the position sensibly.
It will get worse when proposals to abolish the State second pension are implemented and the system reverts to a fully means tested pension level. The State will not face up to the problem s of pensioners and the so called contributory scheme which is no more than taxation.
They are incapable of managing such a scheme in a proper manner, if they did so all the present and future problems would disappear and the new NEST compulsory contributory scheme would not be necessary, which has all the signs of going the same way as NI, with little indication of what is going to happen to the money or any guaranteed result.
The tragedy is that when you look at the figures involved, the cost of paying all pensioners a basic pension of £142 pw is some £30bn less than the present spend on pensioners, even after excluding S2R. This would give a single person some £7,400 per year and a couple twice this and simplify administration.
The money saved could be spent on elderly care and support, or other pensioner subsidy and some redistribution between single and couples. Welfare for pensioners would be eliminated at one fell swoop.
Of course the real solution is to make National Insurance work in the way it was intended, as a contributory pension scheme in which the money is put aside in a fund to guarantee a pension outcome, which would take up 50 to 60% of the income. The balance could then act as work Insurance for full unemployment benefit and work creation.
I was appalled to hear a comment on TV referring to children as “my future pension”, such age dependency is now the norm and needs to be broken, we all need to save for our own pension as part of normal sensible future provision.
We need to break away from benefit being universal, in fact it breaks down into distinct parts of benefit earned by contributions made for those in work and welfare (taken out of taxation) for those incapable of work. The all equal grey Society is not fair or acceptable; discourages work and initiative and creates envy and dissatisfaction.
The Think tanks should start to think and become realistic, personally I am a bit fed up with the undergraduate ideas based on guilt. Although sympathetic to the problems of the starving children, ill treated donkeys, endangered species etc, the perpetual £2 per month pleas do not appear to have made much difference over the past 40 years.
Charity begins at home and Citizen’s advice, Age Concern, Salvation Army, all the medical research and support groups and individuals have a much greater impact on poverty and need. The State and Local Councils now depends on these to a much greater extent than ever before and yet increasingly reduces financial support.
We need to get a firm grip on the problems facing society today, not tinker round the edges plugging holes in leaking dykes or penny pinching savings. There is a lot of wastage in State expenditure, mainly due to policy decisions or lack of them, with no real assessment of needs, cost and what we can afford.
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