Poverty, Pensions and Independence

The Scottish Government has published its proposals for pensions in an independent Scotland. Peter Kelly, Director of the Poverty Alliance, looks at what they say about the referendum debate. 

There was a time when issues of poverty and pensions were inseparable. For thousands of low paid workers in the UK poverty in older age was the reality. It is perhaps one of the greatest successes of the post war welfare state that this situation has been transformed. The graph highlights just how significant the changes are that have taken place. Pensioner poverty rates have fallen significantly, from more than 40% in the early 1970s to around 14% now

This is all good news. But we should not be complacent about pensioner poverty in Scotland. Many of the older people that the Poverty Alliance works with would recognize the progress that has been made in tackling poverty, but they also know the struggles that many pensioners, especially women, still face. So in the context of the debate over Scotland’s constitutional future, questions over how we provide for current and future generations of pensioners are therefore vital.

The Scottish Government’s new paper outlining their proposals for pensions in an independent Scotland represent a useful contribution to the debate. Discussions about pensions are often dominated by what we can ‘afford’ as a society. For example, changing demographics have lead us, and many other nations, to increase the age at which state pensions are paid on the basis that we simply can no longer afford to pay the growing number of older people. Some would say that this is right and perhaps inevitable. But the paper from the Scottish Government proposes that an Independent Commission on the State Pension will be set up to look at the question again. Furthermore, the paper considers the question in relation to Scotland’s record on health inequalities. This is a useful way of framing the debate on pensions.

The Scottish Government also makes a commitment to maintain the ‘triple lock’, ensuring that pensions will increase in line with inflation or earnings or by at least 2.5% (whichever is highest). Along with the  commitment to a state pension of £160, there is a welcome approach in the paper to discussing issues around pensions in a way that focuses on social justice. A greater emphasis on social justice issues in the constitutional debate  is something we have been demanding for some time (and organising).

These debates need to continue. Whether we are for or against independence, when we discuss the future of our pensions system we must be as focused on what kind of society we want to create as well as what we can afford.  Great strides have been made to drive down pensioner poverty, and we must be sure that the choices we make will ensure that that progress continues.

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