Select Committee on Social Security Seventh Report


SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS

    (a)  We recommend that the Government should commission research to establish a minimum income standard for households over pension age in both absolute and relative terms, and that such research should be conducted at regular intervals to inform the Government's progress in countering poverty and social exclusion among older people. (Paragraph 22)

    (b)  Generally, older pensioners face greater challenges than those who are recently retired. They are, currently, less likely to have an occupational pension; where they do, this will have diminished, in relative terms, because it will have been linked, at best, to prices and not to incomes. While the coverage of occupational pensions is likely to increase, the price-related nature of them will not, meaning that this will remain as both a long- and short-term issue. Also, older pensioners' incomes from earnings and investments are lower. As well as having a lower income, older pensioners can face greater expenses, related to disability, mobility needs and depreciation of assets. Therefore, we believe the need to provide enhanced assistance to older pensioners will need to remain a long-term objective for any government. (Paragraph 28)

    (c)  We welcome the Minister's recognition that there are particular problems and challenges regarding pensions for people from ethnic groups. However, we are not convinced that adequate information currently exists regarding the scale or true nature of these problems and we therefore recommend that the Government commission research to provide more information concerning the extent of poverty among minority ethnic pensioners. (Paragraph 45)

    (d)  We note that there is potentially a serious problem which could result in many self-employed people being reliant on means-tested benefits upon retirement, a fact which is exacerbated by the changing nature of self-employment and the capital assets owned by the self-employed. We recognise that there is an argument for compelling the self-employed to make provision for a second pension, and that there is scope for this to be achieved via the state second pension. We recommend that this option be considered once the Pension Provision Group has produced its forthcoming report into pension provision for the self-employed. (Paragraph 49)

    (e)  We agree that the current level of the personal expenses allowance for pensioners living in residential care is inadequate. We recommend that the Government commissions research to establish the level of personal expenses which is necessary to enable pensioners in institutional care to live their lives with dignity. (Paragraph 51)

    (f)  The evidence we have received leads us to conclude that it would be complacent to think that disparities in the incomes of older and younger pensioners and between retired men and women are set to disappear, although they may narrow. However, the oldest look set to remain among the poorest, and particularly the oldest women. In addition, we believe that there are new challenges to be faced, particularly in ascertaining the true situation regarding poverty amongst pensioners from ethnic groups and how this can best be tackled, and regarding the pension provision of self-employed people. (Paragraph 52)

    (g)  We.... conclude that those on the lowest incomes throughout their working lives or with intermittent and fluctuating earnings will be largely dependent on SERPS and the state second pension, to lift themselves above the [Minimum Income Guarantee] MIG. While we have not found agreement on a single definition of poverty, we doubt that anyone would draw the poverty line below the MIG, and note.... that this is a level which the Minister has said he could not live on. (Paragraph 67)

    (h)  We conclude that the present policy of uprating the basic state pension, and the second state pension during retirement, in line with prices, while the MIG is linked to earnings, as is the state second pension at the point of retirement, is unlikely to be sustainable in the long run. (Paragraph 77)

    (i)  We have concluded that, whatever the merits of the argument as to whether [the basic state pension should be linked to earnings], a rise in the level of the state retirement pension by index linking it either to an index based on the FBU/Age Concern concept of low cost but acceptable income or to earnings is affordable, but only in the context of people being prepared to pay higher taxes and national income contributions in the long run. (Paragraph 108)

    (j)  We recommend that the current campaign to encourage take-up of the Minimum Income Guarantee should not be a one-off exercise, but part of a longer term, sustained strategy to improve take-up among all those who are eligible. (Paragraph 124)

    (k)  A take-up campaign for Income Support among pensioners cannot fully succeed unless undertaken in tandem with identification of those eligible for Attendance Allowance. We recommend that the DSS work more closely with local government and local pensioner organisations to identify pensioners who are eligible for Attendance Allowance and who therefore qualify for Income Support and to encourage them to claim both benefits. (Paragraph 126)

    (l)  We recommend that the DSS should conduct research into take-up of the Minimum Income Guarantee among ethnic pensioners and into the best means of encouraging people from different ethnic communities to claim. (Paragraph 130)

    (m)  If the Government is to realise its long-term aim of giving pensioners solid state pension provision on which they can build, without their own pensions and savings being eroded in old age by means-tests, and if we are to make a start in bridging the gap towards our proposed target as proposed by the National Pensioners Convention, we have concluded that an increase in the state non-means-tested pension is inevitable and that it should be done sooner rather than later. (Paragraph 141)

    (n)  We await the details of the proposed pensioner's credit, but unless it can achieve [the objective of reducing the number of pensioners reliant on means-tested benefits in order to avoid poverty], and meet our concerns for the mid-term future, we believe that the earnings link for uprating the basic state pension will need to be restored to provide a firm financial platform for retirement on which people can build for the future. (Paragraph 141)

    (o)  We recommend that in order to directly target help on the oldest pensioners who are also likely to be the poorest, the Government should raise the level of retirement pension for those aged 80 so that it is, and remains, at the equivalent level of the Minimum Income Guarantee. (Paragraph 143)


 
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