Questions questions – what would reform of the state pension mean for us all?

By Claire Nurden, Research and Policy Officer

News of proposed reforms to the pensions system hit the papers in the last few days, and as we all get our heads around the possible changes only one thing is clear – we need more information!

At Independent Age our initial reaction was that, of course, any moves to transfer the cost of bureaucracy into older people’s pockets are welcome. But we mustn’t forget that pension credit currently plays an important role in passporting people through to other support, like council tax benefit. If these reforms go ahead then thought must be given to ensuring the poorest older people still receive everything they are entitled to. Or could this signal the end to means-tested benefits altogether?

And what of the Government’s calculation that the money saved from eliminating means testing will be enough to fund the change? Some personal financial experts are already expressing concern about the effect this could have on the state second pension. Will it just be rolled into the single £140 payment? And will all pensioners feel the benefit of the reform or will it only affect those retiring under the new rules? In which case, can it really be the case that there will be no losers, only winners? If funding a move like this is really so simple, then the question must be raised, why on earth hasn’t it been done before?

Only one thing is certain - it was a very timely announcement given that many of this week’s winners (women and carers) were last week’s losers in the spending review.