Reaction after news on public pension reform

THE chairman of a Scarborough group which champions the rights of older people has given his reaction to ongoing Government moves to overhaul the pension system.

Dennis Orford, of Scarborough and District Older People’s Forum, said that it is a “massive issue” which needs tackling head-on.

A major report stated yesterday that millions of workers in the public sector should work longer for lower pensions.

Lord Hutton’s independent review said linking their pensions to career average earnings, rather than final salaries, would make them “affordable”.

The government has already accepted a previous recommendation of Lord Hutton that public servants should soon pay higher contributions.

Unions have condemned the latest plans and will consider strike action.

Mr Orford said he did not want to comment specifically on the issue of public sector pensions, as the Scarborough forum is a non-political organisation.

But he did say that he was very interested to hear what happens regarding the announcement by Iain Duncan Smith that a flat-rate state pension of more than £140 could come into force.

Mr Duncan Smith, the work and pensions secretary, said the current system rewards bad choices and makes saving not worthwhile.

The reform will help women savers and mean pensioners receive the same regardless of how long they have worked or how much they have earned.

He said: “Too many people on low incomes who do the right thing in saving for their retirement find those savings clawed back through means testing.

“We have to send out a clear message across both the welfare and pension systems – you will be better off in work than on benefits, and you will be better off in retirement if you save.”

The Treasury had been concerned by the affordability of the reforms. The proposed flat-rate pension will have to be higher than the pension credit of £132.60 for a single person.

Mr Orford said: “These are very interesting times at the moment with all the changes going on.

“It’s a massive issue which is becoming more and more significant as all of us are living a lot longer.

“This is the case not just in Britain but throughout the developed world.”

He added that with many people living into their 80s or 90s, there will be increased strain on the NHS as well as the pension pot.

Mr Orford said: “It’s a massive challenge and to be honest I don’t know what the answers are.

“But it does need to be tackled now.”

He explained that one of the major issues he had noticed among pensioners in this area is that people are worse off than they could be due to not claiming all available benefits.

Mr Orford said: “Around 20 per cent of pensioners don’t claim all the benefits to which they are entitled.

“People sometimes see it as accepting charity but it’s not - it’s their entitlement.

“Pensioners should also reassess their financial situation every year or so, because if their savings have dwindled they could be eligible for more benefits.”

Speaking about public pension reforms, Dave Prentis, general secretary of the Unison union, said: “This will be just one more attack on innocent public sector workers who are being expected to pay the price of the deficit, while the bankers who caused it continue to enjoy bumper pay and bonuses.” The government said it would give Lord Hutton’s report “careful consideration”.