Next government must tackle pension and welfare issues

The next government needs to tackle pension and social care issues, according to leading pension policy experts.

Former minister and pensions campaigner, Baroness Altmann, outlined a six-point reform plan, including a call for a radical overhaul of social care. “It is absolutely vital that the government finally addresses the ongoing and worsening crisis in social care. The current system penalises elderly people and their families and lowers care standards, while raising the costs to those paying privately. It is undermining the NHS and places the biggest burdens on those who fall ill, rather than being shared fairly,” Altmann commented.

She added that the pension triple lock should become a double lock, based on earnings and prices, with what she called an arbitrary 2.5% increase removed. “The 2.5% commitment contained in the triple lock adds billions to the cost” Altmann said (it is estimated that state pension has cost £3 billion more for the years 2010 – 2016 than if a double lock had been in place). On pension tax relief, Altmann said that rather than confusing people with the lifetime ISA, a fairer 33% bonus should be offered to everyone, in place of basic rate and higher rate tax relief.

The next government also needs to look at the state pension age, and longer working lives, following the Cridland Review, according to consultant Mercer. “Looking beyond Brexit, the Cridland Review goes to the heart of many of the core issues raised in the current election campaign, including supporting the population with work and care,” said Tony Wood, UK Leader of Mercer’s Health & Benefits business. He added that people need to plan for any changes to the retirement age well in advance, so the next government needs to address the review’s recommendations, and not kick them into the long grass.