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Hot off the Press!! Pensions and Older People.

This morning (20th May) the Coalition Government published its promised full document on its programme for Government. There is a section specifically about Pensions called ’Pensions and older people’ and we’ve added the basic information to this article for convenience.

The main points are:

The Government believes that people deserve dignity and respect in old age, and that they should be provided with the support they need. That means safeguarding key benefits and pensions, and taking action to make it easier for older people to work or volunteer.

• We will restore the earnings link for the basic state pension from April 2011, with a ’triple guarantee’ that pensions are raised by the higher of earnings, prices or 2.5%.

• We will commit to establishing an independent commission to review the long-term affordability of public sector pensions, while protecting accrued rights.

• We will phase out the default retirement age and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women. We will end the rules requiring compulsory annuitisation at 75.

• We will implement the Parliamentary and Health Ombudsman’s recommendation to make fair and transparent payments to Equitable Life policy holders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure.

• We will explore the potential to give people greater flexibility in accessing part of their personal pension fund early.

• We will protect key benefits for older people such as the winter fuel allowance, free TV licences, free bus travel, and free eye tests and prescriptions.

• We will simplify the rules and regulations relating to pensions to help reinvigorate occupational pensions, encouraging companies to offer high-quality pensions to all employees, and we will work with business and the industry to support auto enrolment.

As with any form of financial decisions, it is important always to seek independent financial advice before making any decision regarding your finances. For further information, please contact your usual independent financial adviser.

Andy Rzysko - Director