Age UK reaction to Budget 2011

• Flat rate pension
• No help for those in poverty
• State pension age increase
• Helping older consumers
• Social care funding 

Flat-rate pension

The main highlight of this year’s budget for older people was the indication from the Chancellor on Wednesday that the Government is seriously considering introducing a flat-rate state pension of around £140 a week.

This is good news for future pensioners, but will not extend to people currently claiming state pensions. We would like to see more clarity from the Government on when exactly this flat-rate pension will be brough in, so that people planning for retirement have as much certainty as possible about their financial future.

No help for those in poverty 

While 1.8 million current pensioners live in poverty, we believe that the Government needs to do more than announced today to make sure that everyone gets the vital cash benefits they’re entitled to.

Find out more about our More money in your pocket campaign

State pension age increase

There was an announcement on how the state pension age will rise in the future to take account of increasing life expectancy. The state pension age is already set to rise to 66, between 2024 and 2026 under current legislation and being moved forwards to 2018-2020 in the Pensions Bill, currently in the House of Lords.

The Chancellor indicated that rises past 66 would be decided with the aid of a 'new, more automatic mechanism… based on regular, independent reviews of longevity'.

We don’t agree with the Government’s plans in the Pensions Bill to start raising the state pension age from 65 to 66 in 2018, because we believe that receiving enough time to plan properly for a delayed retirement is very important.

We accept that, as life expectancy increases, rises in the state pension age should be considered, but we have concerns about an automatic system that’s based solely on average life expectancy, as people’s life expectancy varies dramatically across the country.

At present, a woman from Kensington and Chelsea in London aged 65 can expect to live for 26.5 more years, while her counterpart in Glasgow City could expect to live for only another 17.6 years.

There are a host of other factors that we think must be taken into account, including how the state pension age impacts on the poorest, the unemployed and those with health problems or disabilities. 

Find out more about State pension age campaign

Helping older consumers

The Chancellor also made an announcement about scrapping forthcoming regulation for small businesses over the next three years, including equality regulations.

We’re very pleased that the Default Retirement Age is still going to be phased out from this April, as this discriminatory legislation was preventing people who wanted to work past 65 from doing so.

However, we’re very disappointed that something as important as equality when it comes to the provision of goods and services to older people could be affected.

There are over 14 million older consumers in the UK, and annual spending from households including someone over 65 recently passed the £100bn mark for the first time.

We understand that times are hard for small businesses at the moment, but we would have preferred the Government to support small businesses in adapting to regulation changes, rather than throwing the baby out with the bathwater!

More information about ageism in consumer products and services

Social care funding misses out

Finally, we feel that the Chancellor missed an opportunity in the Budget to give hope - and more funding – to the millions of older people who rely on council-funded care and support. Many people are struggling to secure decent care in the face of brutal council cuts.