Money matters

 
 
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Age UK believes that all current and future older people should have sufficient income from state and private sources to live comfortably and particpate fully in society.

    

In order for this to be acheived we want to see: a reduction in pensioner poverty, reforms to state pensions and measures to ensure people can maximise private savings.

It is also important that the benefit system provides the support that people need. Below we summarise some of the key areas:

Issues relating to financial services including banks and cheques are covered in the Consumer issues section of our policy pages.

Latest news

Age UK produces a monthly opens link in new window policy and research e-newsletter for professionals interested in ageing and people in later life.

We have agreed policy positions on a wide range of public policy issues. See our positions on money matters and other areas.

Recent publications and reports

Here are a selection of recent publications. Further papers are listed in the sections below.

opens link in new window Automatic Enrolment earnings thresholds review and revision 2015/16 (Nov 2014) (PDF 99KB)

 opens link in new window Discussion paper: Building an income for retirement: approaches to encourage more pensions saving (Sept 2014) (PDF 6MB) 

opens link in new window Consultation Response: Personal independence payment, indpedendent review, September 2014 (PDF 371 KB)

opens link in new window Age UK inquiry submission: APPG on Hunger and Food Poverty Inquiry, June 2014 (PDF 209 KB)

opens link in new window Ministry of Justice: Transforming the Services of the Office of the Public Guardian, December 2013 (PDF 231 KB)

opens link in new window Problem debt amoung older people, June 2013 (PDF 456 KB)

opens link in new window Agenda for Later Life report 2012, Policy priorities for active ageing - Chapter 3, Tackling need today, preventing poverty tomorrow (PDF 1.7 MB)

Poverty and inequality

It's unacceptable that 1.6 million pensioners live in poverty and up to £5.5 billion of benefits go unclaimed each year.

One area of expenditure where people living on a low income sometimes cut back to make ends meet is food shopping. We have submitted a opens link in new window response to the All-Party Parliamentary Inquiry on Hunger and Food Poverty.

We believe the Government should work with national and local organisations from the public, private and voluntary sectors to set out a plan of action to eliminate pensioner poverty. To acheive this we need better state and private provision, and more needs to be done to ensure that older people receive their full entitlements - for example, by moving towards a system where benefits are paid automatically.

We know how much benefit money is unclaimed because the DWP produce an annual publication on take-up but they were considering stopping this. Age UK submitted a response emphasising the importance of continuing to have benefit take-up estimates. The Government has now said that the publication will continue and the next edition will be published in Spring 2014.

opens link in new window Read Age UK's response on the income-related benefit statistics (PDF 143 KB)

Age UK commissioned research to find out more about older people's day to day experiences of living on a low income.

Read our report and learn more about our work on poverty and low income.

We also commissioned the Pensions Policy Institute to model future levels of pensioner poverty under the current system and a range of different policy changes including reforms to state pensions:

Read about research model of pensioner poverty

Private pensions

opens link in new window Getting the most from the Government's private pension reforms: Age UK's 8-point plan (December 2014) (PDF 386 KB)

opens link in new window Dashboards and jam-jars (December 2014) (PDF 2 MB)

opens link in new window FCA Independent Governance Committees (Oct 2014) (PDF 123 KB)

opens link in new window FCA Independent Governance Committees (Oct 2014) (PDF 123KB)

The Financial Conduct Authority has run a consultation looking at the rules that will apply to the new Independent Governance Committees that will have responsibility for ensuring good governance in contract-based workplace pensions from next April. Age UK is concerned that they will not have sufficient power or be appropriately independent from the pension companies to ensure genuinely good governance that benefits consumers.

opens link in new window Discussion paper: Building an income for retirement: approaches to encourage more pensions saving (Sept 2014) (PDF 6MB)

A discussion paper looking at the wider impact of four different models of incentives to save into a private pension. It views the overall effectiveness of the incentives, together with a breakdown on different aspects of peoples' lives.

opens link in new window Freedom and choice in pensions (June 2014) (PDF 478 KB)

Age UK submitted its response to the H M Treasury consultation, following the Chancellor’s announcement in the March 2014 Budget that there would no longer be any requirement to purchase an annuity from a defined contribution pension pot.

opens link in new window Reshaping workplace pensions for future generations (PDF 120 KB)

This consultation considers the scope for a new category of defined ambition (DA) pensions to complement the defined benefit (DB) and defined contribution (DC) models that currently predominate and proposals for a new regulatory framework for future pension provision.

opens link in new window Better workplace pensions: a consultation on charging (PDF, 145 KB)

Age UK responded to the Money Advice Service call for evidence they put out to help them develop the UK financial capability strategy. Our response was based on our extensive experience of providing information and advice services for older people.

opens link in new window Read our response to the MAS Financial Capability Strategy (PDF, 500 KB)

Since more and more people will be automatically enrolled into a workplace pension the Government has committed to establishing some minimum quality standards for the schemes people will be joining. Age UK submitted a response to the Government’s consultation, in particular, drawing attention to the need to do more around quality standards as people come to convert their pension savings into a retirement income.

opens link in new window Read our response on Quality Standards in workplace pension schemes (PDF 205 KB)

Only 36% of people of working age are contributing to a private pension but this could change with the introduction of automatic enrolment which started to be rolled out in October 2012. Under this policy employers have to automatically enrol all eligible employees into a pension scheme and contribute on their behalf - although the employee can choose to opt out. While this is an essential step, Age UK wants to see further action, with a review to assess how far current changes will meet future pensioners' needs.

Age UK believes that the current restrictions placed on the National Employment Savings Trust (NEST) should be lifted. We responded to the Government's consultation on this issue.

opens link in new window Read our response on NEST restrictions

Age UK submitted evidence to the House of Commons Work and Pensions Committe on automatic enrolment in 2011:

opens link in new window Read our response on automatic enrolment

The 'earnings trigger' is the point at which employees are automatically enrolled and this year, 2012-13, this is aligned to the basic tax threshold. Age UK has argued that this link should be broken to prevent people being excluded from automatic enrolment when the tax threshold rises by £1,100 in 2013-14.

opens link in new window See our response to the consultation on automatic enrolment thresholds

It is important that people are able to make the most of their pension savings on retirement. Age UK has for some time been highlighting the problems that people can have in getting a decent return on their savings if they have one or more small pension pots. We are pleased that the Government is taking action following its consultation on transfers and small pots. However we are concerned that the Government's preferred approach for a system of automatic transfers to the new employer's scheme could lead to some consumer detriment.

opens link in new window Read our response to the consultation on pension transfers and small pots

State Pensions

The UK State Pension is complicated, involves high levels of means-testing and results in low levels of support for many who have had limited employment opportunties due, for example, to caring responsibilities or low income levels. There have been some positive changes which have made it easier for women and carers to build up State Pensions and Age UK strongly support the Government's decision to link increases in the basic State Pension to the higher of increases in earnings, prices (CPI), or 2.5% - the triple guarantee.

Please find attached Age UK's Briefing on the Triple Lock, January 2014

opens link in new window Briefing on Triple Lock (PDF 259 KB)

In January 2013 the Government published proposals to introduce a single-tier State Pension of around £144 a week for people reaching State Pension age in the future. This was followed by a Pension Bill which is currently being considered by Parliament. The Bill also has measures to increases State Pension age and makes change to private pension provision. See our latest Parliamentary briefings.

Age UK supports the aim of a simpler fairer pension that would reduce means-testing and provide a clearer platform for saving. Our submission to the Work and Pensions Select Commitee sets out our view including the importance of the level being high enough to meet the aims and the need for adequate protection during the transition. We are also emphasising the importance of looking at the needs of current pensioners who are not covered by the proposals. (Note that at the time the paper was written it was expected that the changes would start in April 2017 but this was brought forward to April 2016).

opens link in new window Read our submission on state pension reform

Although many women will benefit from the new single-tier pension some who would previoulsy have been able to claim on their partner's contributions could be worse off under the new system. For more information about this issue opens link in new window see our briefing paper.

The Draft Pensions Bill also includes proposals to increase State Pension age from 66 to 67 between April 2026 and 2028 and makes provision for five yearly reviews. Age UK accepts that as life expectancy increases it is reasonable to consider State Pension age but a wide range of factors, including health inequalities need to be taken into account and people must have adequate notice of any changes.

As a result of previous legislation State Pension age is being equalised and then increased to 66 for both men and women by October 2020 - this was delayed by six months campaiging by Age UK and others. For more information see our State pension age campaign.

Benefits

In addition to the State Pension, many older people receive additional support from means-tested benefits such as Pension Credit and help with rent and council tax while those with disabilties can receive support such as Disability Living Allowance or Attendance Allowance.

The Government has embarked on major reforms to the welfare system. Changes include: replacing a range of income-related benefits and tax credits for people of working age with Universal Credit, replacing DLA with Personal Independence Payment and localising council tax support. Age UK is concerned about the impact that some of these changes will have on older people and those approacing retirement.

One specific area of concern is around couples where one is over Pension Credit age and the other is younger. Under a planned change in the future new claimants in the future could be considerable worse of as they will have to claim Universal Credit rather than Pension Credit. We have produced a paper on this issue and also highlighted our concerns in our submission to the House of Commons Select Committee inquiry into the implementation of Universal Credit. At present we do not know when this change will be introduced.

opens link in new window Read our paper on couples where one is over and the other under pension credit age (PDF 325 KB)

opens link in new window Read our submission to the Work and Pensions Committee on Universal Credit (PDF 280 KB)

In 2011 the Government asked for views on possible changes to help with mortage interest for people who are claiming means-tested benefits including Pension Credit however no proposals for changes have been made so far.

opens link in new window Read our response to DWP paper on support for mortgage interest

In April 2013 Council Tax Benefit in England was replaced by a local scheme of support for council tax. Older people are protected but working age people may face higher bills. Age UK is relieved that pensioners are protected but we have concerns - for example, because the scheme will be cash limited there will be no incentive to local authorities to encourage take-up.

opens link in new window Read our response to the consultation on localising council tax support.

In 2011 we produced a briefing paper looking at the importance of Attendance Allowance for older disabled people in response to debate about whether there should be greater intergration of disabilty benefits and funding for care services.

opens link in new window Attendance Allowance and care reform - briefing (PDF 193 KB)

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